Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Air Pollution

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wells.]

Sir Graham Bright: I am grateful for the opportunity to debate an issue that is close to my heart and one that is causing increasing concern in the country at large: the adverse effect of diesel particulate emissions on health and how we can reduce those levels. I shall stick closely to my notes as it is a fairly technical subject and I have a lot to say about it.
I have a vested interest in the matter: I am, and have been since my early twenties, a severe asthmatic. I am by no means alone in that: more than 3 million adults and 1 million children in Britain today are asthmatics. The proportion of young children with asthma in Britain has almost doubled in the past 20 years. Sadly, each year 40 children and 1,900 adults die as a result of asthma attacks, and more than 100,000 are admitted to hospital. As a chronic disease, it interferes with normal activities, with consequent effects on school, work and lifestyle. Almost all asthmatics require long-term medication—in fact, the total cost of asthma approaches £1 billion a year. Therefore, anything that contributes to that cost must be examined very seriously.
I accept that the evidence from the United Kingdom regarding the potential for air pollution to initiate or exacerbate asthma attacks is questionable—not least because there is no universally accepted definition of asthma for clinical purposes. The inconclusiveness of the current evidence, and thus the need for more research, was highlighted in the recent report issued by the Department of Health committee on the medical effects of air pollution. I recommend that hon. Members examine some of the reports that have been produced on that subject. That report looks specifically at the issue of asthma and of outdoor air pollution.
Many asthmatics perceive that air quality has an adverse effect on their condition. There is some evidence to suggest that air quality can exacerbate asthma even if there seems to be little evidence at present that it provokes the onset. However, the debate is important not only to asthmatics.
As another report from the Committee on Medical Effects of Air Pollutants shows, there is increasing evidence that particulate air pollution has an adverse effect on the health of those who do not suffer from recognised respiratory conditions. Therefore, the debate is of great significance to the whole population, but of

special significance to those who live or work in our cities and large towns, where avoidable particulate levels are at their highest.
Particulate emissions from vehicles are of special concern, as, despite the introduction of new regulations, the Department of the Environment has forecast that their levels will continue to rise into the next decade. That is in marked contrast with the other well-known pollutants from vehicles, such as carbon monoxide and sulphur and nitrogen oxides, which reached their peak between 1990 and 1992 and are now forecast to reduce.
Particulate matter is a complex mixture of organic and inorganic substances. Particulates are known also as black smoke or PM10s—which are simply particles that are smaller than 10 microns in diameter. In general, the smaller the particle, the more likely it is to penetrate the body's defence mechanisms and pass through the delicate tissues to the lungs. Dust from roads and factories are typically larger than 2 microns, but fine particles—such as those present in vehicle emissions—are smaller than 2 microns.
Because of their size, the smaller particles tend to remain suspended in the air for longer than the larger particles, and therefore they are much more likely to be inhaled. The smaller particles, such as those from diesel exhausts, are thus considered to be the most likely to cause respiratory disease and are known to be carcinogenic—we must take on board that very serious point.
Airborne particulates can also interact with other pollutants: the interaction of sulphur dioxide and smoke is well documented. It is therefore included in air quality standards. It is also possible for particles to provide a surface on which pollutants can concentrate, and so have a greater adverse effect when inhaled. Airborne particles provide a surface on which other reactions take place—for example, they can contribute to the formulation of smog.
Some of us will remember the smogs of the 1950s. In 1952, 4,000 people died as a result of smog. Under the then Conservative Government, much pioneering research was undertaken into the effects of air pollution on health, particularly from the combustion of coal. As a result, the Clean Air Act 1956 was passed. For a long time afterwards, it was thought that the problem of urban air pollution had been solved.
Two main factors, however, have combined to make it necessary for us to think again. First, there is increasing evidence that exposure to relatively low levels of airborne particles can increase mortality and morbidity and lead to respiratory difficulties. Secondly, there has been a large increase in volumes of traffic in our urban areas, which has increased particulate air pollution from vehicle emissions.
There have been many studies on the effects on health, most of which have been carried out in the United States. The United States Environmental Protection Agency has shown a correlation between PM10 levels and the number of deaths in some American cities.
Other studies that have been undertaken in the United Kingdom, Greece, Switzerland and the Netherlands add to the evidence that particle levels commonly found in urban areas increase death rates and trigger asthma attacks.

Mr. Ian Bruce: I have been listening with rapt attention to my hon. Friend, who is obviously an expert in these matters. In referring to people other than asthmatics, is there any evidence to suggest that hay fever is exacerbated by particulates in the air? My family suffers from hay fever, and my wife has a particularly loud sneeze which usually goes off right next to my ear. I would certainly be persuaded to follow my hon. Friend in terms of taking action if it would also help hay fever sufferers.

Sir Graham Bright: Hay fever is a respiratory disorder. It is obviously related to asthma. Most people believe that hay fever is caused by pollen and grass seeds in the atmosphere. It may also be triggered by other particulates that float about in the atmosphere that we breathe. I am not a medical man, but I believe that hay fever may well be triggered by particulates from exhaust emissions.
None of the studies proves that airborne particle levels are a cause of death, but the weight of medical evidence suggests that health risks occur even at relatively low particle levels. The corollary is that reducing particle levels could have beneficial effects on health. That contention is certainly supported by the Government's Expert Panel on Air Quality Standards.
The World Health Organisation recently revised its air quality guidelines for a series of pollutants, including PM10s. The existing guidelines were originally published in 1987, and were based on an assessment of scientific and medical evidence up to 1985. It is interesting to note that, having reviewed all the data available, the World Health Organisation is unable to recommend a threshold level of airborne particles below which no adverse effects can occur. I regard that as a most serious conclusion, as it shows that all airborne particles are dangerous. We must bear that in mind. It also relates to the intervention by my hon. Friend the Member for South Dorset (Mr. Bruce).
The largest single source of airborne particles in urban areas is road traffic, and within that category the largest component is that derived from diesel exhausts, particularly heavy goods vehicles and buses. Almost all heavy goods vehicles and buses run on diesel. There is also an increasing number of diesel cars. About a quarter of new cars sold have diesel engines.
The most visible result of soot from diesel engines is seen in the form of deposits on urban buildings, but it also permeates clothes and hair. It is estimated that an average bus in London—if there is such a thing—emits 1.5 tonnes of soot every year. As Britain has a total bus fleet of 75,000 buses, 112,500 tonnes of bus exhaust are spewed out every year.

Mr. Ian Bruce: Most of it seems to end up on my collar.

Sir Graham Bright: Absolutely.
That is just the tip of the iceberg. When we take into account the number of lorries and taxis, the total amount of soot emitted from diesel engines runs into millions of tonnes a year. In London alone, it costs some £30 million a year to clean up the soot from diesel emissions.
The high particulate emissions from diesel engines are perhaps their main drawback. The second report of the quality of urban air review group, published in 1992, states:
the impact of diesel emissions on urban air quality is a serious one. Any increase in the proportion of diesel vehicles on our urban streets is to be viewed with considerable concern unless the problem of particulate matter and nitrogen oxide emissions are effectively addressed.
Although, nationally, only 24 per cent. of primary PM10 emissions—that is those released directly into the air—derive from vehicle exhausts—I recognise the point made by the RAC—there are also other causes. If we concentrate on urban levels, however, in 1990 in Greater London, it was estimated that about 86 per cent. by weight of primary PM10 emissions were derived from vehicle exhausts. Therefore, pollution is concentrated where there is traffic in urban areas, but also affects people who live next to major motorways. The Ml passes through my constituency, so air pollution is a cause of concern in the surrounding areas as well as in the town centre.
Other investigations, such as those undertaken by the House of Commons Transport Committee in 1993, provided evidence that much higher levels—up to 96 per cent.—of black smoke emissions derive from road transport in cities such as London, compared with 46 per cent. in the entire United Kingdom.
It is important to consider the subject in respect of local concentrations of particles and their cause, rather than simply looking at the overall figures. In most of our urban areas, PM10 levels are very high. In addition, the vast majority derive from diesel exhausts from medium and heavy goods vehicles and buses—up to 76 per cent. is cited in the Transport Committee report of 1993.
At this point, I hasten to add that there is no reason to be anti-road transport. As I represent Luton, where motor cars are manufactured, I do not want to be anti-road transport, and I am sure that few hon. Members are anti-bus, especially in urban areas. It is important, however, for us to find ways to reduce the problem of pollution caused by buses, so that the full environmental benefits of encouraging more travel by bus can be realised.
It is also reasonable to expect those who develop and operate road transport fleets increasingly to recognise their environmental responsibilities. It is right for the Government to conclude that, because of the high mileage they travel in urban areas, operators of lorries, taxis and buses have a special responsibility to ensure that their vehicle comply with the vehicle emission standards.
It is obvious that bus operators already recognise that: a recent spot check in London revealed that just 8 per cent. of buses were found to be over the current legal exhaust emission level. I congratulate them on that. There is also a lesson for other vehicle operators, as many lorries that pass this building belch out black fumes. Obviously the emissions from buses are much lower than those from other diesel-powered vehicles.
Successive Conservative Governments have an exemplary record in respect of legislation to improve air quality, and the present Government are no exception. I was pleased to be associated with the campaign that led to the Government's decision to insist on stricter controls on emissions from petrol-driven cars compared with those originally proposed by the European Community, which


required all new cars to be fitted with a catalytic converter. In fact, I raised that matter in an Adjournment debate.
As a result of that legislation, nearly 5 million cars on UK roads are fitted with catalytic converters. We also have a baseline threshold for known air pollutants, based on state-of-the-art medical and scientific knowledge. With the measures already introduced, the UK confidently expects to meet its existing international commitments for reductions in nitrogen dioxide and sulphur dioxide.
Further technological advances, such as fast-action catalysts and super-efficient engines, will reduce emissions from petrol-driven cars even further, and much research into that aspect is being undertaken by the main car manufacturers—none more so than Vauxhall, which is located in my constituency.
The Government lead the field, and there can be no doubt of their commitment to ensuring improved air quality. The Government's sustainable air strategy identified urban air quality as one of the key changes to UK environmental policy. That strategy also made it clear that improving air quality depends above all on improvements in the transport sector, and an action plan of two transport-related measures was proposed.
The Government also responded positively to two reports published in November 1995 by the Committee on the Medical Effects of Air Pollutants and the Expert Panel on Air Quality Standards, by laying down strict air quality standards for PM1Os in the UK. The expert panel was established following the Government's commitment in the 1991 White Paper, "This Common Inheritance".
The Government have accepted as a benchmark for policy an average daily concentration of 50µg/m3, which I understand is the equivalent of inhaling not more than 1 mg in 24 hours—quite a calculation. Diesel engines, in common with petrol engine, also emit carbon monoxide, hydrocarbons and nitrogen oxide. Carbon monoxide and hydrocarbons, which cause the characteristic diesel smell, can be easily removed by an oxidation catalyst.
A much smaller percentage of diesel engines compared with petrol engines are currently fitted with catalysts, which perfectly illustrates a particular problem with diesel vehicles. It is not uncommon for diesel-powered vehicles, by contrast with petrol engines, to be kept in use for many years. That is particularly true of buses.
There are about 75,000 single-decker and double-decker buses in the UK seating 17 or more passengers. Of those vehicles, 57 per cent. are more than 10 years old, but 40 per cent. are more than 24 years old. The majority of buses in use today are extremely old vehicles that were built at a time when emission controls were not a high priority. A major trial in London launched in January by my right hon. Friend the Secretary of State for Transport must be wholeheartedly welcomed. The trial will involve about 7,000 London buses running on reduced or low sulphur diesel, and some will be fitted with oxidation catalysts. That is good news, but it does not address the problem of particle emission from buses, taxis and lorries.
The progress made with legislation to reduce emissions from heavy goods vehicles in the form of European Union directives 1 and 2 is also welcome, and will be fully effective in respect of vehicles of more than 7.5 tonnes from October. It will bring the emission limits for new

diesel vehicles in line with the stringent standards that were introduced in the USA in 1994, and will set a limit on particulates for the first time.
However, I emphasise that the limit is still far too high, as evidence from health studies shows. We should aim at a much lower limit. The new limit will apply only to new vehicles, so, because of the long service to which many vehicles are subject, it will be many years before the limit becomes fully effective. For that reason, there is a strong case for the Government to act to encourage the retrofitting to all diesel vehicles of oxidation catalysts and devices to control particulates.
The unique challenge in controlling diesel emissions is that of removing particulates. The only effective way is filtration. Particulate filters, or traps, are known to be highly effective in reducing PM10 levels from diesel exhausts by as much as 90 per cent.—which makes them an effective piece of equipment. Several mechanisms have been developed, but the problem with any conventional filtration device is that it soon clogs and needs replacing, or the soot must be removed by high-temperature combustion. It is not reasonable to expect that to be done on a large scale, because of the practical difficulties and cost.
A much more interesting development in filtration technology is the so-called continuously regenerating trap, or CRT, which was developed in the UK by Johnson Matthey. The CRT works by an ingenious combination of catalyst and filter technology, to remove particulates as well as carbon monoxide and hydrocarbons, which give the characteristic diesel smell. The device comprises two chambers, which can be engineered to provide sufficient sound deadening to replace the conventional silencer and be mounted in its place.
A conventional oxidation catalyst is located in the first chamber, which ensures among other things maximisation of the oxidation of nitrogen monoxide to nitrogen dioxide. The second chamber contains a second filter that traps the particulate matter, which is mostly soot or carbon. The carbon reacts with the nitrogen dioxide to form carbon dioxide and nitrogen—both of which are then emitted as gases. Not only does the filter continuously clean itself, so that it does not need separate cleaning or replacing, but the process reduces the amount of nitrogen oxide.
I had the pleasure of observing the effects of the CRT by comparison with a conventional exhaust system fitted by Johnson Matthey to a 16-year-old Bristol VTR bus, which already had 2.3 million miles on the clock. The results were amazing. When the bus was run, the conventional exhaust system produced black smoke and the smell normally associated with diesel engines. When the bus was switched to the CRT system, the smoke and smell immediately disappeared. If one places a white handkerchief, as I did, over the exhaust outlet, it stays white—so we know that the technology works.
The CRT can be fitted to any turbocharged diesel engine. It is estimated that about half the buses in use today are fitted with such engines. Unfortunately, as many of the old Routemasters used in London were fitted with normally aspirated engines, they are not suitable for retrofitting. It is thought that about 20 per cent. of London's current bus fleet could be fitted with CRTs immediately.
As a minimum, I should like CRTs fitted to every new heavy goods vehicle, bus and taxi—and eventually to diesel cars. Even vehicles that are not suitable for CRT


could benefit from an oxidation catalyst, which remove some particulates as well as most of the carbon monoxide and hydrocarbons, which cause the diesel smell. That improvement would come as a relief to many people.
It is often suggested that retrofitting heavy goods vehicles with emission control devices would be prohibitively expensive. In fact, for a large lorry or bus, it would cost about £3,500, and considerably less for smaller vehicles. As a stab in dark, I assume that the cost for a smaller car or taxi would be £700 or £800. CRTs would be a reasonable and affordable suggestion for all urban-based heavy goods vehicles, taxis and buses, and they should be retrofitted.
There is no doubt that the balance of costs and benefits will make retrofitting even more attractive in the future. The more people that call for CRTs to be fitted, the cheaper they will become, just as happened with catalysts on motor cars. I suggest that the potential benefits for urban air quality would justify fiscal measures to encourage CRT use.
Several trials are being undertaken in which CRTs are fitted on commercial buses. In spring last year, Oxford City Buses started using 20 new Dennis buses fitted with CRTs. As many will be aware, Oxford is one of the cities that has pioneered the increased use of mass passenger transport to reduce car use, so the decision to trial CRT there is obviously especially important.
As an example of CRT being retrofitted to buses, Manchester North Western retrofitted CRT, in December last year, to two of its buses operating in Warrington. I am sure that the House will also be pleased to know that the Conservative-controlled Westminster city council wrote vehicle emission limits into its recently awarded contract for refuse collection. As a result, the company undertaking the contract is fitting CRTs to all its vehicles. We see dustcarts belching out fumes as they compact the trash, and it is nice to know that they will no longer blow out soot in Westminster.
What can be done here in Westminster could be done all over the country. I suggest that fiscal measures should be introduced to encourage that to happen. Those are some of the examples of the use of CRT fitted to heavy good vehicles to the benefit of the urban environment.
The only real barrier at present to CRT is that, in common with all catalytic systems, it needs very low sulphur diesel to work. I appreciate that new EC legislation will lead to lower sulphur fuels being introduced in October this year. I congratulate Shell on having already introduced them. That is good, and should be encouraged. Obviously, compliance with Euro 2 particulate emission limits will reduce sulphur particulates, but the EC limit is well above that in place in Sweden, where very low sulphur diesel—or so-called city diesel—which contains less than 50 parts per million sulphur, is now the norm.
City diesel is available in the United Kingdom, but, because it is not a requirement, the outlets are far too sparse for most practical purposes. The company Greenergy should be congratulated on its initiative in supplying very low sulphur diesel in the UK, as should Sainsbury's on its efforts to increase the use of Greenergy low sulphur diesel from several of its hypermarket fuel outlets.
I accept that it may be possible, with further research, to develop a particulate trap system that does not require such low sulphur fuel, and that should be encouraged. But it is galling to think that we could have benefited from the use of such devices now if low sulphur fuel was more freely available.
I have been talking about ways of reducing the particulate emission from existing diesel engines and thus obtaining an immediate improvement in urban air quality. It is also important, however, to consider other ways in which the problem of particulate emission can be tackled in the longer term.
Without doubt, some of the cleanest fuels that could be used in buses and other commercial vehicles are liquid petroleum gas, or LPG, and compressed natural gas, or CNG. LPG and CNG emit almost no particulate matter, and would be ideal fuels for use in commercial vehicles in towns and cities. Bus companies, in particular, should be encouraged to convert or replace their fleets with vehicles able to use LPG, and they should be provided with incentives to do so. That is especially important, because nil particulate matter comes out of the exhaust when LPG is used.
I await with interest the results, due some time this year, of the trials that have been set up under the Government research project on alternative fuels. Those include trials on the use of LPG, CNG, biodiesel, city diesel, electric vehicles and hybrid vehicles, such as electric-diesel and electric-petrol. Trials are being carried out all over the United Kingdom, many on commercial vehicles. In the long term, those trials could lead to vehicle developments that virtually eliminate urban particulate pollution. In the meantime, however, the problem of what to do with vehicles currently in use will remain.
As an asthmatic, I welcome the fact that the Government recognise the need to take action to reduce airborne particulate pollution, especially in urban areas, and that much legislation has been passed to ensure that. However, because of the seriousness of the problem and the nature of its cause, I do not believe that we can just sit back and wait for the effects of legislation to work through. There is increasing evidence that improving urban air quality represents one of the major future challenges to human health. We have the technology to take a quantum leap in improving urban air quality by reducing particulate emission from vehicles in use now.
I urge the Government to take whatever fiscal and legislative measures are necessary to ensure that. Differential taxing of low sulphur diesel would encourage the fitting of catalytic converters and continuous regenerating traps to all vehicles, just as it encouraged the use of unleaded petrol. Differential taxation also already exists for natural gas, and should be extended to LPG.
We could provide capital allowances to fleet owners to retrofit emission control devices to existing diesel vehicles, and we could reduce the road fund licence for heavy goods vehicles fitted with emission control devices. Tax incentives to encourage research into emission control technology and cleaner alternative fuels would increase the already substantial research programme. As I said a moment ago, there are arguments between fuel suppliers and the manufacturer about whether the existing CRTs can operate on low sulphur fuels, and more research is required.


The benefits of new technology and its ability massively to reduce the problem of urban particulate pollution could be realised now, if we had the will. I urge the Government to be consistent with their excellent record of taking steps to improve air quality, and to do whatever is necessary to ensure that those benefits are realised sooner rather than later. That is a plea from the heart from someone who suffers, with millions of others, from respiratory problems. We could do much to make our lives very much better.

Ms Joan Ruddock: First, I congratulate the hon. Member for Luton, South (Sir G. Bright) on securing the debate. I sympathise with him because of his asthmatic condition. I know from what many of my constituents have told me how distressing a condition it is. As we have heard from the hon. Gentleman, at times it can be life-threatening.
Particulate matter pervades all our environments. In towns and cities, it is most obvious when it is close at hand, in the form of the noxious black smoke that emanates from road vehicles. Many industrial processes, while cleaner today than perhaps ever before, still add to the burden of particulates. Less well known, and not referred to in the debate so far, are the hazards faced by those in rural areas, whose immediate environments may be idyllic. They may be overshadowed, however, by a giant mining or quarrying operation.
Road transport is the greatest single contributor to particulate emissions, but nearly three quarters of total particulate emissions are calculated to come from other sources, spanning both industrial and domestic sectors. As particulates come from so many sources, the starting point for tackling the problem must be to recognise that a holistic approach is required. Such an approach can never be successfully fostered, however, by a Government who are bent on deregulation, privatisation and the awarding of fat cat profits at the expense of public service.
Any meaningful approach to tackling air pollution must encompass the need for national transport and energy policies that are consistent with sustainable development. That is the challenge to which, sadly, the Government cannot rise. It is an issue to which I shall return.
For the moment, let us consider where consensus lies. Particulates have been produced by human economic activity for many centuries. What is new is our knowledge of the range and type, and, more specifically, of the health effects. As the hon. Member for Luton, South said, size appears to be the key to particulates and predictable adverse health effects.
Tiny particles known as PM1Os reach deep into the lung and can enter the bloodstream. Research undertaken by Dr. Joel Schwartz of the Harvard school of public health led to a strong statistical association between PM10 levels and daily death rates. He estimates that, in the United States, 60,000 to 70,000 early deaths a year are the result of average current concentrations of particulate air pollution, reducing life expectancy as a consequence by several years on average.
It is interesting to note that a new five-year study in London has recently found that more people die when ozone and particulate levels in air are high. The report confirms the results of earlier research, and suggests that

there is a need for the Government to curb the impact of traffic pollution on urban air quality. The current edition of The Ends Report notes that, in 1995,
the London Air Quality Network reported that London's air quality was deteriorating despite the introduction of catalytic converters on new cars.
Extrapolating the results of American research to the United Kingdom gives us 10,000 premature deaths per annum. I look to the Minister to tell us whether he agrees with or refutes that extrapolation.
The Committee on Medical Effects of Air Pollutants, reporting in September 1995 on the health effects of non-biological particles in outdoor air found that there was clear evidence of associations between levels of particles such as those found in the United Kingdom and indicators of damage to health. The committee reported that people with pre-existing respiratory and/or cardiac disorders would be expected to be most at risk of acute effects from exposure to particulates. It stated in its report that the effects range from changes in lung function, to increased symptoms, to days of restricted activity, to hospital admissions and to premature mortality. The committee added:
it would be imprudent not to regard the link as causal.
The hon. Member for Luton, South outlined clearly, at a human level, the consequences that are embodied in the report.
We need to look also to the Government's Expert Panel on Air Quality Standards, which reported two months after the committee's report. It is significant that it stated that
it was not yet possible to identify a threshold level for particles below which no ill effects occur.
That is much in line with the World Health Organisation's report, from which the hon. Member for Luton, South has quoted.
The panel went on to recommend a new standard of 50 µg/m3 as a 24-hour running average. I note that the Minister is nodding. It is more significant that the panel recommended that the Government implement a strategy that would reduce progressively both the numbers of 24-hour exceedances of 50µg/m3 and annual concentrations of PM lOs in the UK. I understand that the Government have accepted the 50µg/m3 as a standard. I hope that the Minister will tell us what further consideration he has given to the factors that take us beyond acceptance of the recommendation as a working standard.
I suspect that the Minister, like myself, is more than aware of the exposure above the standard of 50µg/m3 that has occurred in our major cities on many occasions recently. In London, the level was exceeded 29 times. The latest figures that I have relate to 1993. In Belfast, it happened on 45 occasions. In the centre of Birmingham, it occurred on 24 occasions. The figures for Leeds and Bristol are 23 and 25 respectively. We might reflect on what that means in terms of human health.
Perhaps it was those figures that prompted the independent advisory quality of urban air review group to compile a recent report on particle pollution. I wonder what has happened to that report. I wonder whether the Minister will tell us. There are some who believe that the report has been suppressed. Will the Minister tell us what is in the report and what is recommended? Will he tell us also whether he intends to publish it?
Do the Government accept the 50µg/m3 standard and the need to put a strategy in place to enable us to improve on it? That is surely what the hon. Member for Luton, South has been urging. Will the Minister—

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): Will the hon. Lady give way?

Ms Ruddock: I have many questions for the Minister. The hon. Member for Luton, South has paid him several compliments and made some suggestions, but I have many specific questions. I hope that he will respond to them. We have time, and he has the opportunity to respond.

Mr. Clappison: I could respond now.

Ms Ruddock: I am grateful to the Minister for offering to answer now. As I have so many questions, however, he might find it more convenient to answer later.
Will the Minister tell us specifically when the 50µg standard will be adopted, and when he believes that it could be met? Furthermore, what is the Government's view of recent research that indicates that particles smaller than 10 microns are even more injurious to human health?
When will the national air quality strategy be published? A strategy is now long overdue. What are the reasons for the delay? Has there been delay because, as some suspect, other Departments are dragging their feet? How will the Department of the Environment be reconciling the UK strategy with the European framework directive on air quality management and assessment?
Where is the Government's guidance on air quality management for local authorities? I remember well the debates in Committee on what was the Environment Bill. At the last minute, the Government introduced many new proposals in response to the tremendous pressure from the Opposition and many pressure groups. As I have said, they introduced a set of new proposals. They were unable to answer many questions, to produce timetables or to give details. They were unable to produce targets and standards.
The Government promised, however—we legislated to this effect—that, under the Bill when enacted, local authorities must have regard to guidance on the management of air quality in undertaking their new air quality and air management functions. However, although 14 local authority areas have been chosen to pilot the air quality management scheme, no guidance has been published. When will it be published—or will those local authorities just be expected to get on with it? Many of them, of course, have already been doing just that under Labour administrations, taking initiatives long before the Government was embarrassed into making a commitment on air quality strategy.
It would also be helpful if the Minister would say when the pilot schemes are expected to come on stream, and whether a mechanism has been decided for the distribution of the funding of those schemes. He will undoubtedly be aware that local authority associations believe that the pilot scheme will require £15 million if it is to work effectively, but the Government have allocated

just £3 million, to be divided, apparently, among 80 local authorities. Will the Minister elaborate on that, because local authorities are very anxious about their ability to meet the new duties that the Government have imposed on them? When and how will that money be distributed?
I have no doubt that the Minister will be able to tell us some of the measures that the Government undertook in the previous Budget, to which the hon. Member for Luton, South referred—for example, duties on fuel, which are important because the use of fuel impacts on air quality—but, as always, the measures are piecemeal. They lack the essential strategic impact, and attempt to use simplistic market mechanisms as a panacea for all environmental problems.
Where is the advice and the support to local authorities on this issue? The hon. Member for Luton, South referred to the experiments, with which I am familiar, that local authorities have undertaken of their own volition, but where is the encouragement from the Government for local authorities to put their own houses in order? Where is the encouragement for them to run environmentally friendly municipal vehicles? Where is the encouragement for bus companies to run environmentally clean buses?
My local authority of Lewisham has undertaken to experiment with electric vehicles, which are ideal in city centres and the inner city, but my council, like every other council in the land with the exception of Westminster, is strapped for cash because of the Government's policies towards local government.
The vast majority of councils in Britain, which are controlled by the Labour party, are effectively defending the environment and looking for new solutions to critical problems, but they are stopped in their tracks repeatedly by a totally unsympathetic, ideologically hidebound Government who do not support such local authority initiatives. Is it not true—perhaps the Minister will specifically answer this question if indeed it is but an ugly rumour—that Treasury cuts are preventing London Transport Buses from investing in a package of pollution-control measures? I ask the Minister to give a clear yes or no on that issue. Why are the Government prevaricating on so many fronts?
Is the Minister aware that not only does the failure to act mean a continuing toll on human health, but it is a serious loss to British industry? The Government's decision to postpone the deadlines for the control of industrial emissions, for example, from the coating sector, have already had a severely detrimental effect on Britain's environmental technology and services industry.
The technology already exists for particulate emissions to be substantially reduced through PMIO filtration. Such measures would benefit our health and our environment, would boost our environmental industry and create much-needed jobs, but instead the Government prevaricate. No doubt they have bowed to lobbying pressure from the industry and put back the deadline, to the detriment of everyone else.
The hon. Member for Luton, South praised some of the efforts of sectors of the car industry in trying to solve their problems. We, too, applaud those efforts. Much can be done—much is being done. We very much support the technical fixes, such as the CRT—the continuous regeneration trap—filtration, the efforts of Johnson Matthey, and all the work that is being done in that direction, but, as the hon. Gentleman revealed, if we are


to have the benefit of these technical fixes, we will eventually need another technical fix, such as low-sulphur fuels.
We have many ancient buses on our streets today, which pollute our urban environments, as a direct consequence of Government policy. The hon. Gentleman challenged the Minister to respond on fiscal policies, and the Minister must do so. Yes, it can be a matter of fiscal incentives to get the technical fixes in place, but because of bus deregulation and privatisation there has been a tremendous lowering of standards, an increase in the age of the buses on the roads, and, indeed, a fall in their maintenance, which is critical if we are to deal with their emissions.
We accept that technical fixes have an important part to play. We are very much committed to the search for technical fixes, vehicle traps, the use of clean fuels and of cleaner fuels, but overall, no amount of technical fixing can solve the problem alone.
What is required was spelt out to the Government in the report on transport of the royal commission on the environment. The Government, for the first time in history, failed to respond to that report, which laid out a strategy for the whole nation. It explained why technical fixes alone are not enough, and why we must have an integrated and co-ordinated transport system and a national strategy aimed at encouraging and assisting people to use their cars less and to use clean, public transport more. The cleaning up of public transport and municipal vehicles to produce cleaner air for our citizens would reduce the costs to the NHS and the burden of human illness.
All that is laid out clearly for the Government, but they cannot rise to the challenge, because they do not accept national strategies or local government involvement. Today, when we launch the local government campaigns, we can expect the Government to reap the rewards of their total failure to act to clean up our environment and our air in the towns and cities of this country.

Mr. Nicholas Winterton: I congratulate my very good friend the hon. Member for Luton, South (Sir G. Bright) on securing this important debate on air pollution by particulate matter. He advanced a great deal of detail, as did the hon. Member for Lewisham, Deptford (Ms Ruddock), who speaks for the Opposition. I am as concerned as the hon. Lady and my hon. Friend, but I regret the party political rhetoric that she introduced into the debate. My hon. Friend sought to tackle the problem constructively, giving the Government credit where credit was due, but being constructively critical—not party politically critical—where he believed that the Government could have done more.
Towards the end of her speech, the hon. Member for Deptford said that the overwhelming majority of local government was under socialist control. I am pleased to say that I come from one of the few parts of the United Kingdom where the Conservative party has overall control. I refer to Macclesfield borough council, whose leader is frequently praised by the Labour and Liberal Democrat leaders for the policies that the council pursues. Only recently, it received plaudits for being one of the most environmentally friendly councils in the country.
Although I accept a number of the points made by the hon. Lady, I will not accept her claim that only Labour can reduce pollution. I am not sure, for instance, that,

when buses were in the public sector, the companies involved made the investment in new vehicles and technology to which she referred.

Ms Ruddock: It is a matter of record that the bus companies bought more new vehicles when they were publicly owned. Since privatisation, the rate of purchase and renewal has decreased, and as a consequence the aging vehicles are producing greater emissions. Moreover, maintenance has declined under the new regime of privatisation and deregulation.

Mr. Winterton: I am not sure where the hon. Lady finds her facts and statistics. In my view, the age of a vehicle is sometimes less important than the way in which it is maintained. Having used public transport exclusively in the early part of my working life, I can assure the hon. Lady that buses used not to be maintained to the standard that she suggested.
My hon. Friend the Member for Luton, South represents a constituency in which motor vehicles, both domestic and commercial, are very important to the local economy. He has immense knowledge of the industry, and he has done the House a service by raising the subject. I support not only his views in general, but his suggestions as to how the Government can reduce air pollution. He said that he supported their modest fiscal measures relating to, for instance, diesel fuel and unleaded petrol, but felt that they should go further. I agree.
Some years ago, I formed the Manufacturing and Construction Industries Alliance. The last thing that I want is any Government measure that would further undermine or destroy our all too narrow manufacturing base. The Government owe it to the people, and to industry—which is the only source of non-inflationary sustainable economic growth—to help to reduce the pollution of our environment, and air pollution in particular.
I fervently believe that the Government, who have fiercely resisted a return to capital allowances, should consider that way of encouraging people to introduce new technology to reduce such pollution. I ask my hon. Friend the Minister, along with my right hon. and learned Friend the Chancellor of the Exchequer, to consider introducing fiscal measures—I use the phrase in its widest sense—and capital allowances. That would make possible technological advances which, certainly in the case of commercial and domestic motor vehicles, could make a major contribution to the reduction of air pollution by particulate matter.
Unfortunately, there is an anti-roads lobby. I believe that bypasses and properly assessed road projects can in themselves contribute to the reduction of pollution. Most pollution caused by vehicles occurs when they are idling in traffic jams and then moving forward a few yards. Congestion is a major problem, especially in urban areas. I regret the dramatic cut in road projects which would often enable traffic to flow more smoothly, thereby reducing air pollution.
As an asthmatic, my hon. Friend the Member for Luton, South is perhaps better qualified to speak about the subject than most of us—the hon. Member for Deptford paid tribute to him on those grounds—but he also has considerable knowledge of the subject. The House, and the Treasury in particular, should respect that knowledge.


I am sure that my hon. Friend the Minister will respond positively, constructively and sympathetically, but I ask him not to pull his punches behind the scenes. He should urge the Treasury to introduce both fiscal measures and capital allowances, along with other measures to reduce air pollution.
My hon. Friend has done the House and the country a service by speaking as he has today.

Mr. Andrew Robathan: I apologise for not being present at the beginning of the debate. I also apologise to the hon. Member for Lewisham, Deptford (Ms Ruddock) as I heard only half her speech.
As my hon. Friend the Member for Macclesfield (Mr. Winterton) pointed out, this subject is important to everyone—not just those who endure air pollution in Westminster, where I live during the week. I am sorry that the hon. Member for Deptford spoke in party-political terms, because air pollution involves everyone in an apolitical sense. Public attitudes and public policy must be changed. Let us not pretend that every person who sits in a motor car jamming up The Mall, Millbank and Parliament square is a Labour or Conservative supporter; all those people are individuals, who have chosen to drive their cars. We need to change their attitudes. I travelled here by bicycle this morning, and I trust that the hon. Member for Deptford used public transport. She does not seem to be nodding, but I am sure that she uses public transport much more than her car. After all, this place is very well served by public transport.
The hon. Lady made two points. I do not wish to dwell on party-political matters, but she raised them. One was about local government, and how efficient it could be. I see that the hon. Member for Lewisham, East (Mrs. Prentice) is also present; she and I used to sit together on the back benches of Hammersmith and Fulham council. If I believed that that council used its funds efficiently when it was run by the Labour party, I might agree with more that the hon. Member for Deptford said, but in fact it was appallingly inefficient in those days. Money was spent on, for instance, a women's slide library and a women's bus, which—with a great fanfare—was bought for politically correct reasons and parked in the square. It travelled eight miles in a single year in order to be serviced.

Ms Ruddock: According to the hon. Gentleman, party politics have no place in the debate.

Mr. Robathan: I am replying to what the hon. Lady said. She made a party-political speech.
The hon. Lady also suggested that private enterprise and the market had no place in public transport and public policy issues. She particularly mentioned privatisation, and her approach sits ill with new Labour policies. I also see the way in which private enterprise drives matters such as transport much better than the old, dead hand of bureaucracy. I want a good transport system in this country, and such a system is not well driven by Government hand-outs, which have never worked. One has only to consider British Rail, which we shall be discussing this evening. When I was born, there were

15 stations in my constituency. Every one was closed by a nationalised British Rail, and one was reopened under a Conservative Government. Does the hon. Lady want to say more? No.

Ms Ruddock: rose—

Mr. Robathan: Oh, yes.

Ms Ruddock: I in no way suggested that the private sector did not have a role to play. I paid tribute to parts of the private sector in the motor industry and others. I said that the policy of privatisation and deregulation has destroyed our public transport. That has happened in respect of buses. We have poorer and more expensive services and very much worse vehicles in general on our streets today than when the service was under public ownership. The same will happen with the railways, which are already in a dire state in the run-up to privatisation—and deliberately so, because of the Government's policies. The issue is party political because the Government—

Madam Deputy Speaker (Dame Janet Fookes): Order. That was becoming a mini-speech rather than an intervention.

Mr. Robathan: I ask the hon. Lady to defend the record of British Rail. Many excellent people have worked hard, but can she defend its record in closing all those stations? Perhaps in Lewisham, too, the hon. Lady can identify one or two old lines, the course of an old railway on the map, along which once upon a time people travelled before nationalisation.
In my constituency there is a plan to build a new power station and it is causing great concern to many local people. I would say, as we sit under electric light, in an air-conditioned room, using electricity, that it is absolutely vital to air quality and health that we examine all such new bids to discover the impact of a new power station on a highly populated area. My hon. Friend the Minister has already mentioned the issue in response to a question that I asked him previously. It is absolutely essential that we do not, whether driven by the market or by other reasons, build power stations that will pollute not only my constituency but, worse, a highly populated area as the prevailing wind takes the air straight over the city of Leicester. It is important that such matters are considered in very great detail before they proceed.

Mr. Barry Field: My hon. Friend may like to know that the Isle of Wight is unique in having the only health authority in the United Kingdom which sponsors an asthma and allergy research department. I pay tribute to my hon. Friend the Member for Luton, South (Sir G. Bright) for securing the debate and I suggest to my hon. Friend the Member for Blaby (Mr. Robathan) that if he has any concerns about difficulties caused by pollution over Leicester he should send his constituents to the Isle of Wight to see the work being conducted there in trying to find a cure for this dreadful problem.

Mr. Robathan: I am grateful to my hon. Friend. Asthma caused by emissions from power stations is of great concern. As we sit here in London near Battersea and Bankside power stations, which have been closed, and


the London Transport power station in Lots road, which has also been closed, we should consider whether centres of population are good places for emissions from power stations.
I am the president of the Electric Vehicle Association of Great Britain Ltd. I do not need to declare it as an interest since the post is entirely honorary. As the hon. Member for Deptford said, electric vehicles can play a part—but only a part—in reducing emissions in our inner cities. With the hon. Lady, I very much hope that the Government will consider further supporting research into the development of electric vehicles, which can play an important role.
Time is short and I know that my hon. Friend the Minister wants to get on. In considering emissions, we need to consider energy, and reducing its use, as has been mentioned. That includes the conservation of energy—an area in which the Government have taken great strides. It is a pity that we did not receive the Opposition's support in reducing energy use through fiscal means last year.

Ms Ruddock: Perhaps the hon. Gentleman should remember that the Government have just cut the budget for home energy efficiency by a third.

Mr. Robathan: I thought that the hon. Lady might raise that. Who set up that home energy efficiency scheme? I seem to recall that it was the Conservative Government. The scheme has enabled some tremendous work to be done and it continues to do so.
My hon. Friend the Member for Luton, South (Sir G. Bright) specifically referred to diesel pollution. I am the chairman of the all-party cycling group. It is important that hon. Members should not only set an example—that is too easy and perhaps too trite to say—but, as is happening in the Department of Transport, should encourage the movement of public policy in the Departments for Education and Employment and for the Environment towards greater encouragement of cycling and walking. It is easy to mouth the words, but it needs to be written into planning policy guidance, and so on.
Reference has been made to private enterprise and we could briefly mention alternative energy sources. It is proposed that the ferric wheel planned for opposite this place—I am not entirely sure that I want to see it there—be powered by tidal power from the River Thames. Incidentally, it is a private enterprise proposal. The proposal is to be supported and applauded, but at the same time, through enabling measures, we should be encouraging the use of the River Thames as a transport highway.
I shall not dwell on public transport because, as the hon. Member for Deptford said, we all need to use it more. This place is so well served by buses it is extraordinary. One can get almost anywhere by bus, including late at night. I commend the London Transport bus map to the hon. Lady.
We need a change of culture and of public policy. We need to change the civil service attitude that the problem of transport congestion is solved by the building of a new road. That attitude has changed dramatically in my four years in the House, but we must go further. We must ask what is good for all the people of this country, not just for us as individuals who selfishly sit in our little boxes by day. Let us change the culture and let all parties and

the Government take a total view and move forward in reducing air pollution and emissions from vehicles and power stations.

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): I welcome the opportunity to respond to this important debate. I congratulate my hon. Friend the Member for Luton, South (Sir G. Bright) on initiating the debate which, as he so rightly said, concerns an important subject which affects many people, including many who suffer from asthma and other conditions. My hon. Friend is among those who suffer from asthma, and he was able to bring to the House his personal experience, which I am sure is reflected among many of his constituents and the constituents of other hon. Members. I also pay tribute to him for the very authoritative way in which he took the House through a fairly detailed and technical subject. I am sure that he did full justice to the science involved.
I think that it is right in such a debate that we recognise at the outset that we are dealing with a technical and scientific subject that requires detailed consideration, which is very well repaid by coming to the right strategic conclusions. As my hon. Friend the Member for Luton, South and my hon. Friends the Members for Macclesfield (Mr. Winterton) and for Blaby (Mr. Robathan) have said, the debate calls for a constructive response.
I hope that the House will not mind if I am not tempted down some of the wider avenues down which the House was taken earlier. I agreed in part with some of the comments of the hon. Member for Lewisham, Deptford (Ms Ruddock). It is important for the sake of all those affected by this important subject that we all try to take a constructive approach toward it. I agreed with some of her observations, but I am sure that she would not expect me to agree with all of them. I most firmly disagree, however, with her point about a holistic strategy. All the evidence of the Government's work over the past few years points towards formulating a holistic strategy on the basis of very careful scientific analysis. The hon. Lady referred to some of that analysis: the Expert Panel on Air Quality Standards, the strategic document "Air Quality: Meeting the Challenge", and the report of the Committee on Medical Effects of Air Pollutants. We are trying to proceed on the basis of proper, informed scientific debate.
I shall briefly address some of the detailed points made by the hon. Member for Deptford, which require explanation, rather than some of her wider points.
The hon. Lady referred to the limit of 50 microns proposed by the Expert Panel on Air Quality Standards and to the health effects that were the basis for that proposal. It is important that the public understand that the panel proposed that standard on the assumption that although associations between particles and ill health are causative, particle pollution episodes are most likely to exert their effects on mortality by determining the time of death of those rendered susceptible by pre-existing illnesses. She will know that some of the sources of particles occur naturally; that is why it is so difficult to reach a conclusion about a safe standard. Even those which occur naturally—without any additional human-caused particles—would have some effect on health.
The hon. Member for Deptford asked when the standards will be adopted, and I refer her to the expert panel's report and the Government's response to it. I draw


her attention to the Government's response to the report of the Committee on Medical Effects of Air Pollutants, which answers many of her questions. She should be aware that the Government have accepted the expert panel's recommendation that annual average levels of PM10 should continue to be reduced progressively. If I have time, I will explain in detail the measures that we are putting in place to reduce those levels.
The Government have accepted the conclusion that the 50 micron level represents a level at which the large majority of individuals will be unaffected, and we have adopted that level as a relevant benchmark for policy. Importantly, we are committed to considering as quickly as possible whether such a level should be adopted as a target for policy in line with the air quality strategy review now being prepared under the Environment Act 1995. The air quality strategy, which will be available shortly, will be the basis for our holistic strategy.

Ms Ruddock: When will the strategy be made available?

Mr. Clappison: The hon. Member for Deptford knows that we are working towards a strategy based on the best scientific advice, and consideration must be given to that advice. She would expect no less.
The hon. Member for Deptford asked about smaller particles—an important subject. The Department of Health is looking at the evidence on the effects of particles smaller than PM10, and my hon. Friend the Member for Luton, South referred to the fact that smaller particles can remain suspended in the atmosphere for longer than larger particles. It is thought that, in some circumstances, smaller particles can have more profound effects once they have been inhaled. The Department of Health is looking at that matter.
I reject what the hon. Member for Deptford said about local authorities, because the Government are working constructively on the matter with local authorities of all political views. It was a bit rich for the hon. Lady to imply that the Government were failing to work with local authorities and then—in the next breath—to refer to the trials of the new duties taking place in 80 local authorities in 14 different areas up and down the country.
The hon. Member for Deptford asked for guidance to be issued, but it would be premature to give detailed guidance before the national air quality strategy setting out our detailed strategy is made available. That strategy will be available shortly.

Ms Ruddock: When will local authorities start their pilot schemes?

Mr. Clappison: Local authorities are already undertaking the work, and a local authority liaison group is in operation. There is no question that the Government are working in partnership with local authorities.
I wish to refer to the important issues raised by my hon. Friend the Member for Luton, South in his constructive speech. He talked about the new technology available for diesel vehicles, and referred to the continuously regenerating trap. He dealt constructively with the costs and benefits of such a system, and pointed out that the

balance of costs and benefits is likely to change over time. The Government will keep the issues that he raised under careful review, because there is clearly potential for important progress to be made in reducing emissions through that technology, including that developed by Johnson Matthey.
I come now—in as much detail as I can manage—to our overall strategy to reduce particulate matter and to make a major contribution to improving health. The House heard that, last November, the Government welcomed the report of the Committee on Medical Effects of Air Pollutants, and the report of the Expert Panel on Air Quality Standards recommending an air quality standard for particles. The reports concluded that even at the much lower levels now found in the United Kingdom—I emphasise that the levels are falling—particulate matter worsens the condition of people with lung or heart complaints.
The reports give a clear indication that managing and improving the levels of particulates must be one of the top priorities for air quality. The Government have accepted the expert panel's recommendation as a relevant benchmark for policy and we are determined to continue to reduce average levels of fine particles. Our policies and tools for doing that will be set out in the national air quality strategy.
We must deal first with the medical facts—some of which I have mentioned—which have been carefully scrutinised by the committee on the medical effects. The committee's findings ranged across a number of conditions, including heart and lung complaints and other respiratory conditions, and the committee made some important remarks about causation.
The expert panel recommended that a standard of 50 microns should be adopted, and that this should be measured on a 24-hour running average. Measurements of fine particles such as PM10 are relatively recent, but we have been measuring black smoke for several years. From these measurements, we can estimate that average and peak urban levels of fine particles have fallen more than tenfold since the 1960s. Annual average levels of PM10 are now roughly half the expert panel's recommendation, but in our towns and cities—another important point raised by my hon. Friend the Member for Luton, South—the 50-micron limit is exceeded roughly 10 per cent. of the time. The panel recommended that that figure and the annual average concentrations of PM10 should be progressively reduced.
Much of the particulate matter is from natural sources, but I wish to refer also to the measures to be taken to reduce those from human sources. Road transport causes 25 per cent. of all pollution, but the figure is much higher for particulates in urban areas. It is clear that action needs to focus on measures to reduce emissions from road transport to cut particulate levels.
We have not been waiting for the evidence to be firm before acting. Since 1992, the standards of all new on-road vehicles have been progressively tightened. The latest standards—introduced after a breathing space of only three years—were introduced in January this year, and reduce the particulate limit for new lorries and buses by 58 per cent. Further tighter standards will be brought in for diesel cars next year to reduce emissions relative to the 1993 standard by 43 per cent. Standards are being


agreed for light diesel vans for implementation in 1997 and 1998. These regulations reduce not only particle emissions, but other noxious emissions.
On the basis of these measures, we expect to see a fairly dramatic drop in emissions from transport over the next 10 years as older and dirtier vehicles are removed from the fleet. As I have said, these measures are especially important because of their significance during winter smog episodes. Emissions of sulphur dioxide and smoke from domestic households are controlled through the smoke control areas system, introduced in the Clean Air Act 1956. The Environmental Protection Act 1990 was also a landmark because it introduced integrated pollution control for 2,000 of the most polluting processes and subjected a large number of other processes to local authority air pollution control systems. That will make a further substantial contribution to reducing emissions of particles, as will bringing integrated pollution control to bear on large combustion plant for generating electricity.
Those measures will all contribute to reducing emissions, as will the encouragement that the Government have given through fiscal measures on road fuel duties. My hon. Friend the Member for Macclesfield made a most important speech about that matter. Although I cannot speak with full authority on the subject, my hon. Friend will have drawn inferences from the changes which were made in last year's Budget.

Service Children (Boarding Allowance)

11 am

Mr. David Jamieson (Plymouth, Devonport): I am pleased to have secured this debate and that you should be chairing it, Madam Deputy Speaker, as I know of your personal interest in the welfare of service families. This is an opportunity to discuss several important matters—in particular, service children's education. I have raised some of the matters which I intend to raise today in previous Navy debates. I have done so because they are important to Devonport, where many service families live.
Previous defence debates have properly centred on issues of hardware, equipment, security and jobs. Unfortunately, at the end of our last Navy debate, because so many matters of such great importance were raised and due to the exigencies of time, the Minister had to gloss over his response to my remarks about the welfare of service families. Today is an excellent opportunity for him to give a fuller response. I know that, with his usual good humour and his expert knowledge, he will be very much welcomed in the debate today.
The care of service families and, in particular, their children is essential to front-line efficiency and effectiveness. It is essential for service parents, in order to have peace of mind, to know that their children are in good hands. Service families are in a special position. Not only do service men and women risk their life in the service of their country but they often sacrifice personal freedoms that are enjoyed by civilians. Service families may be required to move frequently and their family life and children's education may be disrupted.
Some children go with their parents on postings abroad. The Service Children's Education Authority runs excellent comprehensive schools in mainland Europe which are attended by service children. I am told that the standard of those schools compares with that of the very best schools in Britain. I warmly congratulate the authority on its work in operating the schools and I congratulate the teachers and the other people who run them.
However, some families choose to have their children stay in Britain and take advantage of the boarding school education that is available here. I am aware that the Bett report will review that entitlement and, in particular, whether families located in one place and unlikely to move ought to continue to receive the allowance. I believe that that review should proceed in the fullness of time.
The Ministry of Defence provides the boarding school allowance to meet the fees of children who attend boarding schools in Britain. Service parents have to pay at least 10 per cent. of the cost of sending their child to the boarding school. The scheme is overseen by the Service Children's Education Authority, which gives advice to parents on boarding education and produces the admissible schools list. Last year, there were 815 schools on that list, of which 663 had pupils from the BSA scheme.
In 1994–95, a total of 11,363 service children benefited from the scheme, at a considerable cost to the taxpayer. The cost for that year was £107 million. That is almost twice the funding that one would expect to be provided for day places in local education authority schools. The cost of a day place in an independent school is £3,500 to


£4,000 per annum. An LEA school receives between £2,000 and £2,500 a year. The boarding part of the fee usually doubles the cost of the child's education. So the lowest cost for a child to receive boarding education under the scheme is probably about £7,500 per year.
In today's debate I wish to concentrate minds on the operation of the boarding school allowance, especially on the role of the Service Children's Education Authority. I shall show that deregulation is causing potential risk to the learning and general welfare of children. I support the BSA scheme. The debate is not about whether the scheme should exist; it is needed to provide continuity of education for service children when their parents are expected to move around the country or the world. However, the scheme in its present form tends to favour the higher ranks. Anyone can see that 10 per cent. of the fee is a greater proportion of a sergeant's pay than of a major's pay.
More could be made of the local education authority boarding schools. The Service Children's Education Authority recognises that they are as good as or, in some cases, better than other schools. In its advice to parents, it says of the LEA boarding schools:
these schools are often able to provide better facilities and a wider curriculum than many independent schools.

Mr. Andrew Robathan: The hon. Gentleman says that the scheme favours higher ranks. If he looks at it differently, he will note that it favours people who tend to be over 40 who have children of school age. Most of the more junior ranks will leave the services earlier. The hon. Gentleman will discover that most people serve approximately five or seven years in the armed forces and leave before they are even 30. A full career for a non-commissioned officer takes him to the age of 40 and officers go on further than that. That is a pertinent reason why the scheme favours higher ranks.

Mr. Jamieson: I accept the hon. Gentleman's argument. I do not want to go into the matter for too long, but if one takes two people in exactly the same circumstances serving for the same period, the person of a junior rank is at a disadvantage under the scheme compared with the person of a senior rank on higher pay. Obviously, the pay of a sergeant who may have children in school is less than a major's pay and 10 per cent. of the fee is a considerably greater proportion of his pay. That is the point that I am making, but I fully accept what the hon. Gentleman says: people who serve longer in the services will benefit more from the scheme.
Many local education authority boarding schools are better than and all of them are cheaper than the independent schools. I wish to know from the Minister why they are not included on the admissible schools list. Why do parents have to send for a separate list of the LEA boarding schools? Why are they not put on the list so that parents can see them? Why are some schools on the list in the first place? Why are they not excluded? The Service Children's Education Authority gave the following advice to parents in relation to all-age integrated independent schools:
Nevertheless, there are some, and especially some of the least expensive, that may be said to fall short of really satisfactory provision. Parents must take care and seek good advice.
The advice continues:
You will be particularly wise to take advice when considering schools in this area of the market.
The Service Children's Education Authority is putting a health warning on some of the schools that it has on its list. I ask the Minister: why are the schools on the list if the SCEA feels the obligation to give a health warning about their quality? Why are the boarding schools in the LEA system not on the list when the SCEA says that many of them provide a much better education at a lower cost? Today's debate is not about the principle of the scheme—which I support—but about its operation and the quality of advice to parents. Today's debate is not about the principle of private education—it is not an attack on private or independent schools.
I recognise that many independent schools are excellent and that the majority are at least satisfactory, if not good. One could argue that they should be giving a good education because, in most cases, they are funded at a much higher level than local education authority schools. However, I am concerned about those schools that are falling below the standard that they should achieve. Evelyn Waugh described independent schools with acerbic accuracy in "Decline and Fall" when he said:
We class schools into four grades: Leading School, First-Rate School, Good School, and School. Frankly, School is pretty bad.
The SCEA should closely examine some of the schools that Evelyn Waugh would class as "school". What are the issues for the schools in the boarding school allowance scheme? First, what checks are made on academic standards in the schools? Secondly, is the taxpayer getting full value for money from the £107 million spent in the schools? Thirdly, is there a threat to the value and existence of the reports on boarding schools from social services departments? Finally, does the Service Children's Education Authority need to revise its role, its practices and its advice to parents?
I refer to academic achievement. For many decades, Her Majesty's inspectors of schools have had the role of inspecting the quality of schools. Since 1993, the Office for Standards in Education has taken over that role. Among other things, it looks at the quality of teaching, academic standards achieved and the value for money that the school gives. When Ofsted was set up, it was the intention that local education authority schools would be inspected every four years and that independent schools would be inspected every seven years.
I shall contrast what happens with an inspection in a local education authority school with an inspection in an independent school. If an LEA school has an inspection, there has to be a pre-meeting with the head, the governors and the parents. When the inspection is completed, a summary of the report has to be sent to all parents in the school. The parents are also informed where they can get hold of the full report on the school should they wish to see it, which is usually within the school and provided free of charge. The report is also made public. Therefore, it is available for the wider community to look at and, if necessary, for comment in the press. I have no objection to that procedure.
When deficiencies are found in the school, an action plan has to be drawn up, where appropriate, which is overseen by the LEA and the inspectors may have a role in coming back at some future time. In extreme cases, where a school is deemed to be failing or to be


substantially substandard, an education association can be sent into the school and it can be made grant maintained or, in extreme circumstances, it can close. As hon. Members know, that has already happened to the Hackney Downs school in London.
I contrast that approach with that of the independent schools. There is a dwindling number of reports on the independent schools. In the past two weeks, I have received a letter from the chief executive of Ofsted. He said that in 1993–94, there were 19 inspections of independent schools; in 1994–95, there were 13; in 1995–96, there were just nine; and in 1996–97, up to three schools will be inspected in the independent sector—none, one, two or three schools may be inspected. I have concluded that Ofsted is going to cease inspecting independent schools.
I have seen some of the inspections that have been made on independent schools and they show the same wide spectrum of achievement that one sees in local education authority schools and in grant-maintained schools. Some of the reports on the schools are excellent, most are good or satisfactory, but some are poor. If they were LEA schools, they would be deemed to be failing schools. Such a school has no obligation to show the report to parents. On 17 February 1994, I received a letter from the then Under-Secretary of State for Schools who referred to Ofsted reports on independent schools as follows:
Any such school which is the subject of a published report is supplied with copies of it which it can distribute as it sees fit.
He then said:
The onus is on the school to distribute the report to interested parties or to advise them where the reports can be obtained.
Many of the smaller independent schools, private schools, have no governors—there is just a proprietor and a head, and in some cases the proprietor is the head. I refer to meetings to discuss what is in the report and to what Ofsted said in its document "Inspecting Independent Schools":
It is for the proprietor and/or governors to decide who else shall attend the meeting.
The inspectors are not obligated to call parents or anyone else into the meetings to discuss the report, other than the proprietor—who can choose who he informs.
Last year, Finborough school in Suffolk had 123 pupils from the boarding school allowance scheme. The head of the school wrote to the parents in 1994 regarding an Ofsted inspection that he had had the previous year. He wrote to parents—one of whom is my constituent—as follows:
We have not obtained copies of the Report for parents because",
and he then listed a number of reasons, one of which was:
we were extremely unhappy about the way it was carried out and what we believe are serious statistical misrepresentations of the evidence of teaching standards.
He rejected the report because it was critical of his school, of which he is the principal and proprietor, and from which—I dare say—he receives profits. If he had been a local education authority head teacher, he would have been committing an offence by not providing the report to parents.
The message is very simple: if an independent school has had an Ofsted report and it does not like it, it can commit the report to a dusty shelf or to the bin. I am

pleased that, in the case of Finborough school and one other school, as a result of pressure from me and my writing to the Minister, the report was sent by the Service Children's Education Authority to service families of children at the schools who were receiving funds through the boarding school allowance scheme.

Mr. Nick Hawkins: The hon. Gentleman will acknowledge that head teachers in the local education authority sector write to parents rejecting the result of Ofsted inspections. That happened in my constituency recently. What he describes is not by any means restricted to independent schools.

Mr. Jamieson: Head teachers or governors can write to parents disagreeing with reports; it is their right to do so. I do not say that the head teacher did not have the right to put his view, but it is not right that the head teacher of an independent school can block parents from seeing a report or even knowing of its existence, as in this case. At an LEA school, the head teachers and governors are obliged by law to give all parents a summary of the report and make sure that the full report is available in the school. I am sure that the hon. Gentleman, on reflection, would agree that, if that is right for LEA schools, it must be right for independent schools, and especially for those schools that receive substantial sums of taxpayers' money—£107 million altogether—through the scheme.

Mr. Hawkins: The hon. Gentleman described a head teacher who wrote to parents to tell them that there had been an Ofsted report. It is possible for parents to write to Ofsted, as I did in my constituency, to get a copy. They were made aware that there had been an Ofsted inspection and could have got the report themselves.

Mr. Jamieson: I do not want to get too engaged by this, but a local education school has an obligation under the law to provide a summary, and to provide the full report in the school, to the parents. Many parents, including my constituent, did not know of the existence of the report or inspection until I pointed out that the inspection had taken place. Eventually, under pressure, the Service Children's Education Authority sent my constituent a copy of the report. When he read it—and, by then, it was nearly a year out of date—he wished that he had taken his children out of the school earlier than he had. We need the same rules for both sorts of school. I am sure that the hon. Gentleman agrees with that.
Ofsted is no longer able to safeguard academic standards, because no inspections will take place. It performs a short registration inspection every five years but says that three inspections at most will take place next year. On that basis, we have moved from one inspection every seven years to one every 700 years as there are now 2,294 independent schools. We need full inspections of independent schools, especially of those that benefit from substantial sums of taxpayers' money and reports, as with local education authority schools, should be sent to interested parents.
My second concern involves boarding and pastoral arrangements. That is especially important because children in boarding schools are, by definition, detached from their parents. Often, service children's parents are not even in the same country but are a long way away.


We need police checks on the people employed in the schools and we must ensure that the conditions of the Children Act 1989 are properly discharged.
In the late 1980s, there was much justified concern about several schools. I shall briefly refer to some of those concerns. In May 1989, there was the case of Crookham Court school near Newbury. The then Member of Parliament demanded an inquiry but was told by the then Department of Education and Science that it was "powerless to act". The school was described as "dirty and depressing". It had safety hazards and unsatisfactory teaching standards, but there was much worse to come. The head teacher and a member of staff were convicted of serious sexual offences against boys at the school. Those boys were mainly from service families. The significance of that case is that the school was closed not by action taken by the Ministry of Defence but because of publicity given to the school by Esther Rantzen in her "That's Life" programme. It was closed not because of action taken by inspectors, Government Departments or the MOD but because the media took the matter up.
That was not an isolated instance. There was the case in 1982 of St. George's school at Great Finborough in Suffolk. The BBC's "Checkpoint" programme said:
This remarkable establishment specialises in educating the children of servicemen, and by all accounts makes Dickens's Dotheboys Hall look like a holiday camp.
A former games master at the school
was one of a number of ex-staff who told Checkpoint about repression, brutality and more … Ninety-five per cent of the 250-odd boarding pupils are children of servicemen".
Very much worse was revealed by "Checkpoint" about serious abuse of children. Those facts were revealed not by the DES or the MOD but by the media. That school did not close; it carried on trading and I believe that it is still open under very different management and a different name.
My last example is the 1990 Her Majesty's inspectorate report on the Hilsea school in Basingstoke. The report was disastrous in every respect. It uncovered poor teaching, unsafe buildings and hopelessly out-of-date teaching methods and said that 92 per cent. of the children were from armed forces families. That school did not close in 1990; it carried on despite the report. It closed in 1992 only because of declining pupil numbers, yet it was supported almost solely by the taxpayer right to the very end. Had it been an LEA school, it would have been deemed to be failing and would probably have been closed.
For balance, there are some excellent schools. I have chosen an independent school that was established and run by the MOD—the Duke of York Royal Military school, Dover. The inspectors reported on it in February 1991 and said:
This is a good school with high standards of work and behaviour, excellent care, sound teaching, generous resources, spacious premises and generally good accommodation. It is clear that the school achieves the aims as set out in its prospectus.
Oh that all the schools were as good as that one.
Partly as a response to concern about the inadequacy of certain schools, section 87 of the Children Act 1989 created a duty for the social services departments of local authorities to inspect the boarding and pastoral

arrangements of such schools. I have seen some of those reports. They are very thorough and exacting. They check hygiene, dormitories and whether there are unnatural punishments or abuse. However, I well recall considering in the small hours of one morning a clause of the Deregulation and Contracting Out Bill which gave independent schools the right to choose their own inspectors and, if they wished, to dispense with local authority social services departments, which would probably know schools and their past records well. Most independent schools are continuing with local authority social service department reports, but is this not yet another opportunity for a bad school to opt out of inspection that may be critical?
Many independent schools belong to independent schools organisations and some internal reporting goes on between schools. Sometimes that leads to schools inspecting each other. Last year, CfBT produced a report called "Ofsted and Onward". CfBT is one of the leading private companies in the inspection field and has been much praised for its work. Mike Douse, one of its inspectors, talked of mutual inspection and said:
To take one extreme and hopefully non-representative case, the Report on one non-government school … the only definite criticisms applying to the lack of facilities (including one major safety issue) and the need to 'strive for a more adventurous approach to work'.
That is what one school said about the other. He continued:
But, in reality, this Independent institution is—if the term has meaning—a 'failing school'. Its fees are high and its pupils drawn from wealthy (albeit often broken) families, the sons and daughters of military officers, British expatriates, and successful businessmen.
This school must still be on the admissible schools list, yet he continues:
Very many of its pupils fail to gain entry to the public schools of even their second—or third—choice; several teachers are incapable of keeping order, let alone organising and encouraging learning; bullying and other forms of unacceptable behaviour are rampant; and 'value for money' is a cheerless joke.
If the SCEA can find out which school it is, it ought to review whether it should continue on the list, receiving substantial sums of taxpayers' money.
Can we also check on how the money is spent in independent schools and on the level of profit being made by the proprietor? I repeat that some are not charitable foundations. They have a sole proprietor and are run as a business and a limited company. For many of the independent schools on the boarding school allowance, a substantial part, if not most, of their funding comes from the taxpayer through the scheme. We might want to look through the company accounts to find out how money is being spent, but if a company's turnover is less than £2.8 million a year, there is no obligation to publish full accounts. The company can publish abbreviated accounts, which are totally unhelpful if one wants to find out how the money is spent.
In contrast, governors, head teachers, the local education authority and parents can all see the budgets of local education schools that are spending taxpayers' money and see how the money is spent. If a parent wants to see the budget and how money is being allocated, it can be done at any time through the head teacher or the


governing body. Yet no one has the right or duty to check how taxpayers' money is being spent in independent schools.

Mr. Hawkins: Surely the hon. Gentleman must acknowledge that all the matters that he has discussed in connection with local education authorities, such as the rights of parents and of governors, are the results of our educational reforms of recent years—reforms that the Labour party opposed, tooth and nail, at every turn.

Mr. Jamieson: In that case, I would expect the hon. Gentleman to agree that those reforms ought also to extend to the independent schools that are receiving substantial sums of taxpayers' money. If he speaks later in the debate, I will be interested to hear him confirm that that is his view.
What is the role of the SCEA, which acts on behalf of the Ministry of Defence? It seems to do little more than administer the system and distribute the fund. It has no right of entry to independent schools and the Minister of State for the Armed Forces confirmed that in a written answer on 2 April, when he said:
SCEA staff visit independent schools by invitation to assess pastoral care arrangements for service children; they have no statutory right of access. Visit reports are therefore written on the understanding that they remain for internal use only."—[Official Report, 2 April 1996; Vol. 275, c. 103.]
The SCEA does not have the right of access and parents do not have the right to see what reports are written.
To protect the academic and pastoral concerns of pupils action needs to be taken. The SCEA needs to be far more robust. If schools are to go on the admissible schools list and receive substantial amounts of public funds, the SCEA should draw up a contract for them and they should agree in it that its inspectors have the right to go into the school and look at the pastoral arrangements.
The SCEA must ensure that it sees a school's full audited accounts, so that it can find out how the money is being spent. If a school is not prepared to undergo such inspections, fair enough—it is a private company—but strike it off the list and deny it taxpayers' money. Also, the SCEA should make all information on an independent school available to parents and potential parents.
Schools that have a low academic performance or where there are other concerns should be taken off the admissible schools list. In a recent answer about the Quantock school in Somerset, the Minister said that his inspectors had visited the school and found it suitable to remain on the list. I must draw to his attention the fact that the Independent Schools Association Inc.—the trade organisation—has terminated the membership of that school. I am sure the SCEA and the Minister would want to look into that and find out why. It is extremely unusual for that to happen, and there must be good reasons.
Much more stringent checks must be made on the schools that go on the admissible schools list. Two years ago, the Minister with responsibility for schools told me in a letter:
As far as participation in the Government's Assisted Places Scheme is concerned, all 295 schools have had to satisfy a very stringent criteria for admission and must be able to demonstrate the highest academic achievements.
I want those criteria to be applied to schools on the admissible schools list. If they are right for assisted places schools, they must be right for the children of service families who attend independent schools.
The Minister should consider the matter carefully and advise the Department for Education and Employment that there is a need for full Ofsted inspections of all independent schools, particularly those in schemes in which they benefit from taxpayers' money and, most important, all those on the admissible schools list. That can be done readily and easily.
The Minister ought to instruct the SCEA to put those local education authority boarding schools on the admissible schools list, particularly when it admits that they are often much better than the independent schools that are on the list already.
I have raised some important matters today, with which the Minister will want to deal with his usual care. The welfare of children and the quality of their education are of paramount importance. Independent schools operate in a wholly deregulated environment. There is virtually no reporting by Ofsted. The SCEA has no statutory obligation to inspect. There are no accounts for public scrutiny, the reports of social services departments are deregulated and schools can choose their own inspectors.
We need to give parents the ability to distinguish between the majority of good independent schools and the minority of poor schools. As history has instructed us, a deregulated environment is one in which the unscrupulous can thrive, mediocrity can flourish and—in the extreme—paedophiles can go undetected.

Mr. Barry Porter: On a point of order, Madam Deputy Speaker. It will not have escaped your notice that there are six hon. Members in the Chamber, four of whom have no choice in the matter—I am here only because a meeting was postponed for half an hour—and that five civil servants are present and being prevented from doing whatever they normally do in the Ministry of Defence on Wednesday mornings. That should be brought to the notice of the Select Committee on Procedure because I am afraid that it is not unique. I am in no way criticising the hon. Member for Plymouth, Devonport (Mr. Jamieson), who has brought up an important and worthy matter. Can I have your assurance, Madam Deputy Speaker, that it will be brought to the attention of that Committee? I hate to contemplate what on earth the general public who see our proceedings will think about it.

Madam Deputy Speaker (Dame Janet Fookes): The number of people in the Chamber and the use of people's time are not matters for me. If the hon. Member feels strongly about it, he should discuss it directly with the Procedure Committee, but I remind him that there were lengthy debates before we embarked on this arrangement for Wednesday mornings.

Mr. Paul Murphy: I very much take the point made by the hon. Member for Wirral, South (Mr. Porter) about the number of hon. Members in the Chamber for this debate, but I do not think that that number reflects the debate's importance, which is very great, as the hon. Gentleman said. As we were told by my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), the boarding school allowance costs more than —100 million a year, which averages out at


about £9,000 per pupil involved in the scheme, and there are more than 11,000 pupils taking advantage of the allowance.
I think that it is important for the House to congratulate my hon. Friend the Member for Devonport on having the initiative to raise this issue today. He has of course been persistent in his inquiries over many months. He has been hard working and diligent in these matters, and his speech revealed that invaluable sense of responsibility, which is enviable. His speech was tightly and very carefully argued, and it reflected his deep personal interest in these matters.
Hon. Members should recognise that my hon. Friend the Member for Devonport represents—as you do, Madam Deputy Speaker—a very large number of military personnel, and that he has an impeccable educational background, having been a teacher for many years and, indeed, a senior vice principal at a school in Plymouth. He has emphasised the fact that he has no general problems with the principle of the allowance; I echo that belief. We are not debating whether there should be a boarding school allowance—we are debating the quality of education with which the boarding school allowance is linked.
My hon. Friend has rightly drawn the House's attention to some major concerns and highlighted, I believe, some very disturbing facts that I know the Minister will deal with in his reply.
There is no doubt that the system of inspection of private schools requires careful scrutiny and attention. My hon. Friend the Member for Devonport said in the final part of his speech that many independent schools are involved in the scheme that are of a very high character and in which a very good standard is achieved. But he has also said—the House should be troubled by this—that some schools involved in the scheme are, according to this week's article in The Times Educational Supplement, "dubious". When we bear in mind that £100 million of taxpayer's money has been used for the boarding school allowance, we must be very careful because the House is the guardian of the public purse.
Inspections of independent schools are generally too infrequent. Because of that lack of frequency, standards in those schools will inevitably be tested less frequently and will, therefore, be less reliable. My hon. Friend the Member for Devonport told me that the Service Children's Education Authority has no right of entry to the schools on its admissible lists, and I think that that practice is wrong. I believe that the fact that Ofsted will now hold inspections only every five years is equally wrong. The combination of those two practices inevitably brings into doubt the quality of education provided by those schools to children of service personnel.
Schools that belong to the Headmasters' Conference are self-regulatory to a very large extent, of course, which we accept. But not all schools on the list belong to the Headmasters' Conference, and it was to those schools that my hon. Friend the Member for Devonport addressed his remarks.
The Minister will no doubt refer to the Bett report, although I believe that we will have a thorough debate on it later this year. That report mentions boarding school allowances and suggests that the payment rate mechanism is poor. The report states:

We suggest that the new system would be simpler to administer, and less open to any criticism that the mechanism currently used encourages some parents to send their children to less than adequate schools.
The admissible schools' list unquestionably needs overhauling. My hon. Friend the Member for Devonport said that the assisted places scheme—which is another matter, but it is interesting to compare the schemes—has a carefully created list for parents who want their children to take advantage of it. He also referred to state boarding schools. For the life of me, I cannot understand why state boarding schools which the Ministry of Defence believes offer high quality education should not be on the same list.
The Bett report refers to a need "for tighter quality control". Paragraph 18 of the report says:
We feel strongly that there should be tighter 'quality control' as far as MOD money spent on boarding schools is concerned, not least so that Service children can be certain of receiving, as far as is possible, a good standard of education. The approved list of boarding schools maintained by the MOD does not constitute any reliable certification of quality since SCEA does not inspect independent schools, and schools are almost never removed from the list. The only requirement for inclusion on the list is of being registered with the Department for Education (DFE). On the other hand, we note that SCEA schools, like all schools in the maintained sector, are subject to the same four yearly inspection by OFSTED. We believe that for a school to be included on the MOD approved list it should be subject either to this OFSTED inspection regime or to an alternative, equivalent inspection regime recognised as such by the MOD and the DFE. There should also be a clear procedure for removal from the approved list in the event of unsatisfactory reports from the Inspectors.
I believe that that final point is crucial.
In general, the Labour party is very much of the view that the schools on which the Ministry of Defence spends £100 million should be much more carefully and tightly inspected. In general, Labour also agrees with the recent personnel policy guidelines, which states:
We aim to ensure … that allowances enable service personnel to undertake the duties required of them without incurring unreasonable personal costs, taking into account conditions prevailing in civilian life.
The House will also be aware that the numbers of boarders in this country has declined in the past 10 or 20 years by 10,000 or 20,000 and that, although 25 per cent. of our Army is still in Germany, the number of armed service personnel who can look forward to a more stable family existence is likely to increase. The consequence of those two trends means that, for parents in the MOD, the need for boarding schools is likely to be a less significant factor. It was also interesting that a survey undertaken by those involved with the Bett report showed that only one half of parents in the armed services with children at boarding schools would have chosen boarding schools as their first choice. That statistic also demonstrates the likely change in society in the next few years.
The Bett report proposes changes not only to school inspection and quality control but to the payment system and to eligibility. The report says that there are too many exemption clauses, allowing the boarding school allowance to be used when it is unnecessary and costly. I think that there is a very strong case for examining those exemption clauses and for doing away with many of them because, in certain circumstances, the boarding school allowance is unnecessary and, therefore, a waste of taxpayers' money.


We believe that, as the Bett report says, the rules should be tightened so that only those families that are genuinely mobile are eligible for the scheme.
My hon. Friend the Member for Devonport also spoke about the need for advice, which I think is crucial. I really wonder whether the advice to parents that is given verbally is good enough. I think that that advice should be given at unit level so far as is practicable and not simply by circulars being sent to parents who are considering taking advantage of the scheme.

Mr. Keith Mans: I apologise for not being in the Chamber at the beginning of the hon. Gentleman's speech, but I was in the Defence Select Committee. Will the hon. Gentleman tell the House whether the Labour party will retain this allowance or whether—because of what he has already said in this debate—the Labour party's intention is to phase it out slowly or to make it more restrictive?

Mr. Murphy: As the hon. Gentleman said, he was not present when I began my speech. I made it clear that we do not disagree with the principle of the boarding school allowance and that it will continue under a Labour Government. We are saying that the recommendations of the Bett report, which has yet to be debated in the House but which, in this connection, seems to be highly sensible, are such that the Labour party could approve them.
My hon. Friend the Member for Devonport has rendered considerable service to parents in the Army, Navy and Air Force by bringing this important matter to the attention not only of the House but of the country. I am sure that the Minister of State will be able to deal with the various points raised in this interesting debate.

The Minister of State for the Armed Forces (Mr. Nicholas Soames): I congratulate the hon. Member for Plymouth, Devonport (Mr. Jamieson) on securing this Adjournment debate on what is clearly an extremely important issue. He made a measured and balanced speech until perhaps the final sentence when he said that deregulation led to mediocrity and, as I understood it, to what my late lamented friend Geoffrey Dickens used to call "phaedopiles". My experience is to look at deregulation the other way around. Clearly, there will be casualties in deregulation as in any aspect of life, whether in the public or private sector, but deregulation has, by and large, led to a great expansion of enterprise, competition and excellence. The hon. Gentleman unbalanced what had been an admirable speech by a rather foolish conclusion.
The House should be aware that the hon. Gentleman's interest in defence—he represents an area with such a distinguished history of loyal and dedicated service—is matched by the fact that, as a former teacher, he has a long-expressed interest in education standards in the independent sector and, correctly in my view—I applaud him for it—in the need to ensure that the Ministry of Defence gets the value for money that it should for the £107 million that it spends annually on the boarding school allowance. The hon. Gentleman has raised the matter on the Floor of the House a number of times and in written questions to me. He is therefore well qualified to raise the matter again this morning.
As Minister of State for the Armed Forces, responsible for the welfare and deployment of service men and women and for almost every other aspect of their lives, I share the hon. Gentleman's concern that this particular aspect of their lives should be satisfactory. I am therefore glad of the opportunity to respond to the points that he raised. "Allegations" is the wrong word—let us say that the hon. Gentleman raised a number of points about various schools. I shall be writing to him in detail about them as I do not have the necessary facts to answer them, especially his final point relating to a school which, I understand, has left the trade association. I shall have that investigated at once, and I am grateful to him for letting me know about it. I shall write to him about the specific matters that he raised with which I am unable to deal now.
The hon. Gentleman made a number of extremely interesting points, and I listened with great care to what he had to say. I found much of what he said persuasive and I understand his genuine concern, which we share in every aspect of defence business, to ensure not only that the Ministry of Defence achieves best value for taxpayers' money but, just as important, that service children receive the best possible education.
I pay tribute to the work of service schools, which are splendid. Indeed, in my discussions with officials this morning while being briefed for this debate, it was said that many of the schools are excellent. I know from my own experience of visiting units all over the world that service men and women greatly value the education that their children receive. I also pay tribute to all the teachers and administrators who do so much to provide such an admirable service for the children of our service men and women.
I assure the hon. Gentleman and others that my Department shares the hon. Gentleman's aims—indeed, it would be like condemning motherhood and apple pie not to do so. The hon. Gentleman raised some important issues that need further investigation. I shall be in touch with him about them and would like him to come to see me to talk about them.
Although we are committed to devoting as much as possible to the business of the front line, we are of course mindful of our wider responsibilities. Although the provision of the boarding school allowance in these times of reduced defence budgets may seem odd to people who do not understand the principle, the scheme is soundly based. I acknowledge that what the hon. Gentleman and the hon. Member for Torfaen (Mr. Murphy) said was not a criticism of the boarding school allowance per se but of the way in which it is handled.
The policy is soundly based. Not everyone realises how important such an allowance is to the otherwise turbulent side of family life for service men and women. It may be helpful, therefore, if I set out for the benefit of the House a little of the background to the issues raised today.
I am sure that we all agree that our highly trained and professional men and women are the armed forces' greatest asset and that it is essential that we look after their interests, not only to ensure that morale remains high, although that is critical, but because we are more likely to retain these admirable people in the forces if they feel that their needs and those of their families are properly met and fettled.
Service life places incomparable pressures on the family. Too few civilians—those who have never had any connection with the forces—understand that service men


and women are not the same as civilians. Service personnel may be invited to make the ultimate sacrifice. They are not ordinary people, and I take this opportunity to pay my own very warm tribute to the families of all personnel in the armed forces. Without their support and tolerance, undoubtedly our armed forces would not function so effectively. The understanding and support that service wives give to their husbands, and vice versa, is crucial to the effectiveness of our forces. However, we cannot and will not take, and never have taken, that support for granted.
The welfare of one's family is one of the most important motivations in seeking any career. The services are clearly no exception—indeed, they are a shining example. Given the pressures that service families so often face, it is even more important to ensure that service personnel are confident that the welfare of their families is guaranteed. By doing that, we achieve value for money as we retain important people with specialised expertise in whom we have invested valuable training resources and who have such exceptional experience to give to the service of their Queen and country.
The provision of the boarding school allowance is one of the ways in which the needs of our service personnel are met. The allowance is available to service parents of all ranks to provide a stable education for their children in the face of the turbulence that is often a feature of service life. Service personnel who follow the flag and move their families wherever they are required to serve are eligible to receive it. Many of the service people most affected by turbulence are high achievers. Therefore, although the boarding school allowance is a cost to the Department, it is an extremely important tool in helping to persuade highly trained and vital service personnel to stay in the forces—something that we are very conscious of the need to do better across the board.
Because of your interest in defence, Madam Deputy Speaker, you are aware that service personnel and their families can be posted to various parts of the United Kingdom and overseas. Some of these postings are to isolated locations where adequate educational facilities are sometimes simply not available. Postings often occur at highly irregular intervals and sometimes at very short notice—such is the lot of service families. Depending on the service, postings last on average for two years. That could result in frequent and disruptive school change for children required to accompany their parents.
The availability of the boarding school allowance allows personnel of all ranks who suffer such turbulence the opportunity, if they so wish, to maintain their children in boarding schools. Children thus spend a substantial time at one school, which provides the continuity that is so important in education and which would otherwise be missing.
Boarding education is confined mainly to the independent sector, as only a small number of schools in the state sector offer boarding facilities. The provision of assistance with the fees enables service personnel to provide their children with the continuity offered by a boarding education. The boarding school allowance is not an education subsidy to allow service personnel access to a superior education—many state schools provide an

education that is every bit as good as that provided by schools in the independent sector—but a contribution towards the average cost of a boarding education.

Mr. Jamieson: Does the Minister accept that local education authority boarding schools that are deemed to be excellent should be included on the admissible schools list, and that listed independent schools that are found to have shortcomings should be removed from it?

Mr. Soames: I do not agree with that proposition. The hon. Gentleman has raised a number of very important points this morning. I shall consider his comments and perhaps he and I can discuss them officially after I have raised them with the Department for Education and Employment.
Those who wish their children to attend the more expensive boarding schools will have to pay a substantial proportion of the fees. The maximum rate of boarding school allowance that may be claimed is set at 75 per cent. of the average fees of all those schools attended by at least 30 children of service personnel. The rate is currently £1,883 per term for children at junior schools and £2,248 per term for children at senior schools. Parents are required to contribute a minimum of 10 per cent. of the school fees, although a large number pay considerably more than that. The average level of school fees in the independent sector is £3,415 per term according to the independent schools information service. Service parents who send their children to an "average" school must therefore find £1,200 out of their own pockets for each child, each term.
As with parents everywhere, service parents are responsible for selecting an appropriate school to suit the needs of their children. In order to find the right school, some parents will seek to stabilise their families in an area of their choice and serve unaccompanied when required to do so. Some elect to move their children around with them, and most children cope successfully with several changes of school. I find that amazing and I am always impressed by how well such children manage.
However, frequent changes of school may be harmful to children's education. Some have little alternative but to attend boarding school. That group is relatively small: of a service population of some 231,000, only about 7,500—about 3.2 per cent.—claim boarding school allowance. As the hon. Member for Torfaen (Mr. Murphy) pointed out, that number has reduced by more than 30 per cent. in the past five years as a result not only of draw-down in the armed forces but of control measures put in place to restrict the allowance to those who are genuinely affected by turbulence.
The hon. Member for Devonport is concerned that some parents elect to send their children to schools that do not perform well academically or that have been criticised in other areas. The Ministry of Defence has no statutory authority to control the educational standards of schools attended by children whose parents are in receipt of boarding school allowance—that responsibility rests with the Department for Education and Employment. However, the Ministry of Defence is keen to ensure that parents receive good advice about their selection of schools.
The Service Children's Education Agency—a new agency established on 1 April this year—has assumed the responsibility previously exercised by the Service


Children's Education Authority to provide general education advice to parents. In order to achieve that aim, it will continue to maintain close links with DFEE, OFSTED and other relevant professional bodies. It will also visit schools attended by a large number of children of service personnel, or when concerns are expressed about a school, in order to monitor the quality of accommodation and of pastoral care.
The Ministry of Defence maintains a list of schools for which parents may claim boarding school allowance. A copy of that list is kept in the Library. Prior to 1 April this year, the Service Children's Education Authority was responsible for checking that each school maintained adequate control over boarding facilities and met certain other basic criteria—including registration with the DFEE—before it was placed on the admissible schools list. That responsibility now rests with the Service Children's Education Agency.
Schools must be registered with the DFEE in accordance with the Education Act 1994 and must attain, and maintain, an acceptable standard of education as required by that Department. Before initial registration, a school is inspected by one of Her Majesty's inspectors and standards are monitored subsequently through "light touch" inspections carried out by the Office for Standards in Education, examining standards of achievement, teaching, learning and welfare. It is intended that those inspections be carried out every five years approximately, or more often when a school gives cause for concern. I shall discuss the hon. Gentleman's points on that subject with the Department for Education and Employment.
When standards are considered to be unsatisfactory in respect of unsuitable or inadequate accommodation, a failure to provide efficient and suitable education, or the existence of an unsuitable proprietor or teacher, the Secretary of State for Education and Employment issues a notice of complaint. That gives the school a specified period—usually six months—in which to improve in those areas where it was considered to be failing. If the school fails to comply within the notice period, it will be struck off the register and compelled to close, at which time it would no longer be eligible to remain on the Ministry of Defence list of admissible schools. When Ofsted reports are published about particular schools, the Service Children's Education Agency ensures that they are made available to parents with children at those schools. I noted the hon. Gentleman's point about reports and I shall consider that matter.
As to the question of the distribution of funds, the Service Children's Education Agency does not distribute funds to schools. Boarding school allowance is paid to service personnel to allow them to choose the most appropriate school for their children. The agency makes as much information as possible available to parents in order to help to inform their choice. We are constantly looking for ways of improving the quality of the information that we provide, and some of the hon. Gentleman's points are worthy of consideration in that regard.
The independent review—mentioned by the hon. Member for Torfaen—of the armed forces manpower, career and remuneration structures conducted recently by Sir Michael Bett was tasked with making recommendations to adapt those structures to the foreseeable needs of the next century. Its work on remuneration structures included an examination of all allowances paid to service personnel, paying particular attention to those factors of service life that created a need for them.
It concluded that, because of the unusually high level of mobility in the services—particularly in the Army—there is a continuing need to ensure that service personnel have the opportunity to provide their children with continuity of education through a boarding education. The provision of proper education for children is clearly a strong imperative for all parents, and the independent review concluded that it may not be possible for the services to retain personnel who feel unable to meet their aspirations in that regard.
Bett recognised that there is a continuing need for a form of boarding school allowance. The review made a number of recommendations to target the overall education allowance package better in order to ensure that only those with a genuine liability to move are entitled to benefit. The recommendations are being examined, together with all of the independent review's other recommendations, and I shall announce the results of the study later this year. Following a meeting this morning, I am pleased to report to the House that the work is going extremely well.
One factor that clearly influences the future cost of the boarding school allowance is the extent to which we are able to offer stability to service personnel and to their families. That will depend largely upon the operational demands that are placed on the individual services in the future.
The hon. Member for Devonport is right to raise those issues in circumstances where public funds are involved. As the hon. Member for Torfaen said, the hon. Gentleman has been extremely diligent in pursuing the matter in the past few years and I am grateful for his interest. As a former teacher, he will be well aware of the importance of maintaining and improving educational standards. The Government and the Ministry of Defence are committed to achieving the highest possible standards in education.
While the Ministry of Defence has no statutory power to regulate schools in the independent sector, I am grateful to the hon. Gentleman for bringing his concerns to my attention on the Floor of the House. I shall pass them on to my right hon. Friend the Secretary of State for Education and Employment and, having discussed them, I shall be happy to meet the hon. Gentleman, should he so desire, to explore the matters in greater detail.
The hon. Gentleman has raised important matters touching upon the welfare and morale of service men and women who are posted all over the world and I have no doubt that we shall have further discussions in future. I am grateful to him for raising the matter. We have had a thoroughly worthwhile and useful debate.

European Civil Air Transport

Mr. John Wilkinson: I am grateful for the opportunity to open a debate on competition in European civil air transport. For months, indeed years, I have sought such a debate in Government time as the Government's policy of civil air transport liberalisation has been a great success story for the travelling public, the airlines, airline-related industries and the British economy, through the creation of employment and the healthy, positive contribution that British airlines make to the United Kingdom balance of payments.
Although a parliamentary pas de deux with my hon. Friend the Minister for Transport in London is always entertaining, the subject merits wider parliamentary participation and a debate lasting longer than 30 minutes. It seems that good fortune is mine today as, with your indulgence, Mr. Deputy Speaker, we may have more than the expected time, but I see no other hon. Members wishing to join what is likely to be a pas de deux.
The transfer of British Airways into the private sector was one of the flagship privatisations of my noble Friend Lady Thatcher's first term of office. The restructuring of the airline without state aid from 1981 to 1983 under the inspired stewardship of that dynamic duo, Lord King and Sir Colin Marshall, set a standard for competitive achievement that is the envy of Europe and laid the foundation for British Airways' current position as a global force with strategic alliances in the Pacific basin through its stake in Qantas, in the Americas through its stake in US Air and in Europe through its stakes in TAT and Deutsche BA. It has also enjoyed a dominant pivotal position because of its primary location at Heathrow at the heart of Europe—if I may use that phrase. Heathrow is the world's premier international airport and the principal gateway to our continent from north America. British Airways notably survived the past air transport recession profitably when other private sector airlines were going under and a number of state carriers were sustained by national subsidies.
There are, of course, other striking British air transport success stories. If I name but a few, I am seeking not to be invidious but only to avoid taking up too much time. British Midland, whose competitive achievements in domestic scheduled services and in opening up European routes with affordable fares while providing a high-quality service, has been a remarkable success. Virgin Atlantic is clearly a highly original and enterprising airline, unafraid to take on the big boys, including British Airways. Air UK's development of services out of Stansted has been successful and has been thoroughly beneficial to that airport. The inclusive tour and charter sector is also vigorous in Britain, with carriers such as Britannia and Monarch.
Britain is in the vanguard of air transport liberalisation in Europe but is subject to state subsidised competition from nationalised continental carriers. That is in gross breach of the spirit, if not the technical letter, of the treaty of Rome. It is also an affront to the single integrated European market which, for most British people, is the principal purpose of the United Kingdom's participation in the European Union.
Subsidies to airlines take various forms, including operational grants, direct subsidies and indirect financial assistance. Examples include capital injections, debt

write-offs, fare subsidies and favourable tax treatments as well as less visible forms of state support which none the less favour national flag carrying airlines.
Under article 92 of the treaty of Rome
any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, shall, insofar as it affects trade between Member States, be incompatible with the common market.
In some circumstances, state aid is permissible to assist deprived areas to facilitate the development of certain economic activities if it does not distort trading conditions and, in "exceptional circumstances", if the Council of Ministers agrees unanimously.
The definition of the phrase "exceptional circumstances" is crucial, and Iberia, for example, claims that the recent devaluation of the peseta is such a circumstance. The interpretation of the rules on state aid for airlines has changed recently. The previous understanding was that major subsidies which would otherwise have been forbidden might be allowed on a "one-time, last-time" basis, with the aid to be used to allow the airline to become self-financing thereafter. I call that the drunken sailor syndrome. It has worked out as "one last drink" for state carriers such as Air France and Iberia.
Brussels, however, has made it clear that from 1 April 1997 it will seek to ban state aid to airlines for anything other than "exceptional and unforeseen" crises. When aid takes the form of a financial injection, it is normally subject to an investigation under article 93(2) of the treaty of Rome. States are meant to inform the Commission in advance under article 93(3). The Commission itself—for transport aid, Directorate-General VII—is responsible for investigating such aid and deciding whether it is compatible with the exceptions allowed under the treaty.
The Commission's approach to aviation state aid is set out in its guidelines, that were published in 1984 and 1994. There are two main elements to its evaluation. First, it considers whether a state injection into an airline is actually state aid. Under the market economy investor principle, an injection is an aid in terms of the treaty only if it is apparent that a private shareholder in analogous circumstances would not have made a comparable investment.
If the investment is deemed to be aid, the Commission proceeds to consider it in the light of exceptions, particularly that set out in article 92(3)(c). DG VII interprets that exception as permitting restructuring aid so long as it is transparent, facilitates a viable restructuring plan and does not transfer the recipient's difficulties to its competitors. There lies the rub.
In the past five years, the Commission has investigated a number of state aid cases of civil air transport. I shall list some of them. In 1991, Sabena received £584 million in state aid—that is sterling not ecu. That was approved. Air France received £665 million, and that too was approved. In 1992, Iberia received a grant of £670 million, which was approved. In 1993, Air France applied for £170 million, but that case was rejected. That was the only rejection on the list. In 1993, Aer Lingus received state aid of £170 million which was approved. In 1994, TAP Air Portugal's grant of £710 million was approved, as was Olympic Airways' grant of £995 million, and Air France received £2.4 billion, also with EC approval. In


1996, under the eagle eye of Commissioner Kinnock, Iberia received state aid of £460 million and that was approved under the market economy investor principle. We shall see how that works out. In other words, the flag carriers of six European Union member states out of 15 have between them received £6.364 billion of state aid over the past five years. Forty per cent. of EU states have received that grotesquely large amount of state subsidy—and some, such as Air France and Iberia, have repeatedly come back for more.
In July 1994, the European Commission approved state aid to Air France of 20 billion francs—about £2.4 billion—to fund a so-called restructuring plan, to be paid in three instalments. Concern at that decision prompted a number of European economic area airlines, notably led by British Airways, to mount a legal challenge before the European Court in the first instance. British Midland has brought a separate case. The UK Government, to their credit, have intervened formally to support the airlines—as have Sweden, Denmark and Norway. The cases are likely to be heard this year, probably in the autumn. The UK Government have also applied directly to the European Court to have the Commission's decision annulled. I applaud that intervention, as I did the intervention in respect of bovine spongiform encephalopathy yesterday. The Government's case has been stayed at our request pending the outcome of the airlines' own cases.
The Commission approved the second instalment of state aid to Air France in 1995 and is due to consider this year whether the third and final instalment should be approved.
The Spanish Government have sought approval for further state aid to Iberia totalling 130 billion pesetas, which is £688 million. The Commission's decision of 31 January approved an immediate injection of £460 million and left the door open for a further 20 billion pesetas of state aid—£106 million—in 1997, provided that certain cost savings and productivity improvements are made. Those payments are to be allowed under the market economy investor principle, but how that is applied will be crucial to the credibility of Commissioner Kinnock and the organisation that he represents. I have a particular interest because of my interest in Latin America. Iberia has been using state subsidies to fund its investments in carriers in Latin America, such as Aerolineas Argentinas and Ladeco in Chile. I understand that those stakes are to be reduced or liquidated; nevertheless, those investments have been permitted by the Commission.
The House may find it noteworthy and instructive to know some of the arguments that British Airways has rightly been advancing in making its case against the proposed latest tranche of aid to Iberia, which have been supported by independent aviation consultants Avmark International—which undertook detailed analysis of Iberia's so-called exceptional circumstances. British Airways' key points, in addition to universally applicable arguments against the payment of state aid to our competitors, are that this is the second occasion on which state aid has been requested for Iberia, and it falls within the period of the restructuring plan that accompanied the first tranche of state aid of 120 billion pesetas in 1992. To allow a further capital injection would violate the so-called "one-time, last-time" principle that has heretofore governed the payment of state aid to carriers in the European Union.
If one analyses the four reasons given by the Spanish authorities to justify further state aid, one realises that they cannot be classified as exceptional circumstances unforeseen and external to the company. First, Iberia claims that the Gulf war and the recession have affected all airlines, and that argument was also used to justify the 1992 capital injection. It is a long time since the Gulf war and certain carriers, particularly British Airways—which lost an aircraft at the outset of the hostilities—have weathered all the difficulties. Secondly, Iberia cites currency depreciation, but that is an international fact of business life and probably had little negative effect on Iberia's finances. Thirdly, Iberia blames domestic liberalisation, but that was planned for many years and was much trumpeted by the European Union. There has been progress in that respect in Spain to some degree and in other countries to a much higher degree. Finally, Iberia refers to its Latin American strategy, which everybody who knew the market realised was a recipe for disaster as well as a waste of money for taxpayers in the UK and elsewhere in the EU.
If the European Commission cannot even regulate effectively the single market in civil air transport, how can it be allowed to negotiate air service agreements with third countries on behalf of member states?

Mr. Terry Dicks: The theme of my hon. Friend's remarks—I apologise for missing the start of his speech—is that such subsidies are like a vegetarian saying that he wants no nuts, tomato or mayonnaise in his diet, which is possible but highly unbelievable. My hon. Friend makes the point, much more eloquently than I can do, that the claim made by the Commission and the airlines that they are not really keen on state subsidies but use them out of necessity is nothing more than a pack of lies.

Mr. Wilkinson: My hon. Friend is more trenchant in his comments but, as usual, is highly perceptive. Like me, my hon. Friend has many constituents whose livelihoods depend on civil air transport and on a vigorous British air transport industry. The Government have been firm, but they must maintain their firm stance on behalf of British airlines against unfair competition.
I urge the Government to take a further step and to veto any arrogation unto itself by the European Union of the right to negotiate air service agreements on the UK's behalf. That entitlement and prerogative essentially appertain to a sovereign independent state. If we allow the EU to act in that way, the UK will lose its position as the dominant civil air transport power in Europe. We can be sure that rights that have previously been ours will be frittered away to the benefit of the French, Dutch and Germans, who also have important continental gateways. I hope that the Government will veto any extension of the Commission's costly incompetence in an area of vital British national interest.

Mr. Keith Mans: I welcome the opportunity to say a few words in support of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) on the important subject of civil air transport. Again and again over the years, we have seen a continental airline ask for money from its Government, and we have been told by the European Commission in Brussels that such aid will be a


one-off payment and the last to the particular airline. On that basis, such aid has been allowed. Again and again, such support has been to the disadvantage essentially of British airlines that are much more commercially oriented, particularly since the privatisation of British Airways.
It goes a bit further than that. If air transport is to become more competitive, more commercial and give a better service to the customer throughout Europe, the only way forward is the way that has been pioneered by airlines in this country—airlines that are commercially viable and that are now the best in the world. Some continental airlines have seen the light. Lufthansa, for instance, is following the same route as British Airways, and that is to the advantage of Europe and customers throughout the European Union.
I also fully endorse the remarks made by my hon. Friend the Member for Ruislip-Northwood about the Commission having negotiating rights with the United States. Not only do continental airlines have to prove their commercial viability but the Commission that has to be made to understand that—before it can take on the responsibility, if it ever does, for negotiating air rights with the United States and other parts of the world on behalf of European Union countries—it too must be seen not to support those who wish to subsidise airlines in their countries.
I strongly believe that we should not give negotiating rights to the European Commission until it stops allowing states within the European Union to subsidise their own airlines. I would also like to see a clear situation in which we have time, after the subsidies have stopped, to see how those airlines perform before any thought is given to giving some of our own rights away to Brussels.
There is no doubt in my mind that there must be a limit to the way in which airlines that are in the public sector continue to receive subsidies. It is all very well to say that airlines in the private sector will be able to compete because they are more efficient, but the problem lies in the way in which some of the subsidised airlines operate. My hon. Friend the Member for Ruislip-Northwood mentioned Iberia and it is a classic case. The subsidised airlines use subsidies, not for infrastructure improvement or to reduce the number of employees and stop overmanning, but to target routes and make it difficult for competitors to operate profitably on those routes in the hope of getting sufficient market share to push competitors off those routes. That is the wrong approach and it will result in profitable airlines being unable to offer the service that they can at the moment and in those airlines that are not profitable asking for more subsidies to fly routes that were not profitable in the first place.
One of the lessons from the British Airways experience was that it considered its route structure 10 or 15 years ago. It considered all routes, however historic they may have been, and decided whether they were profitable. It cut the routes that were not profitable and cut the number of its employees in half in the process. It created a profitable airline as a result of the hard decisions that it took some 10 years ago. British Airways was then able to build up those routes again, and made routes that previously were unprofitable, profitable and in the process employed more people. British Airways now has twice the route network in miles flown, but it employs the same number of people. That must be the way ahead for state

airlines such as Air France and Iberia, rather than attempts to prop up an existing unprofitable, uncommercial structure with continuing amounts of state aid.

The Minister for Transport in London (Mr. Steve Norris): I am grateful to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) for giving us the opportunity of this debate today. When he introduced the debate, at a rather unexpected hour, I thought that I perceived a note of mild and customarily gentlemanly disappointment in his voice at the thought that he and I would execute a pas de deux this morning. As an Under-Secretary, I declare myself on this occasion an unsatisfactory substitute. I assure my hon. Friend that, although on this occasion we are using the device of an Adjournment debate and although my noble Friend Viscount Goschen is the Minister for Aviation and Shipping, my right hon. Friend the Secretary of State for Transport takes the issue that my hon. Friend raised today extremely seriously. As I say, I am grateful to my hon. Friend for raising the subject and for expressing himself in such a clear and, if I may say so, trenchant fashion.
We also enjoyed an unexpected but none the less immensely pleasurable minor explosion from my hon. Friend the Member for Hayes and Harlington (Mr. Dicks), who, although he is a parliamentary private secretary for a Transport Minister, was obviously speaking in a private constituency capacity. It would be a shame to lose him. We also heard from my hon. Friend the Member for Wyre (Mr. Mans). My hon. Friends who have spoken are all characterised by the fact that they have taken an interest for many years in the subject. Heathrow is in the constituency of my hon. Friend the Member for Hayes and Harlington, and my hon. Friend the Member for Wyre has long had an interest in aviation matters. I do not believe that there is an hon. Member who has been clearer about his interest in the issue of European state aid than my hon. Friend the Member for Ruislip-Northwood.
Some £56 billion of United Kingdom visible trade passed through British airports in 1994. Each year, expenditure by air travellers visiting the UK, and by foreign passengers on UK airlines, totals nearly £10 billion. Total employment in airlines and airports within the UK is estimated at over 100,000. Air transport is a major industry, and a substantial UK success story, which fully deserves the attention of the House.
My hon. Friend the Member for Ruislip-Northwood will know that the Government, as he suggested, are firmly committed to competition in aviation, because competition is good for our airlines, good for our airports, good for the UK economy, and good for users. It is because we are convinced of the benefits of competition that the Government have long championed the cause of aviation liberalisation in Europe. The liberal bilateral agreements that the UK reached with Germany and the Netherlands in 1984, with Luxembourg and Belgium in 1985, and with Ireland in 1988, gave impetus to the momentum towards liberalisation throughout the European Community. The UK was instrumental in promoting and concluding the series of legislative measures, culminating in the so-called third package, which created the single market in aviation in Europe.
The single European market in aviation has formally existed since 1 January 1993. On international services within the Community, the third package opened up


access to all Community carriers. Member states must use the same criteria when issuing licences on grounds of safety and financial fitness. Member states can no longer favour their national carriers by issuing licences on a discretionary basis, and restrictions on cross-border investment have been removed.
Fares, frequency and capacity are now decided by airlines according to commercial principles, instead of being regulated by member states, subject only to safeguards against anti-competitive practices. The pattern of services can respond freely to changes in the pattern of demand. High-cost carriers can no longer rely on market protection from Governments to ward off more efficient and innovative competitors.
The only remaining restrictions apply on domestic services, and until 1 April 1997 member states may prohibit access to airlines registered in other member states. But that final barrier to access will be lifted in less than 12 months' time. All Community carriers will then be free to compete on all international and all domestic services within the Community. National carriers will no longer have the advantage of protection on busy internal routes from their major Community competitors. Competition will be further enhanced on international routes that are fed by those domestic services. The elimination of the final vestiges of regulated market access will present new commercial opportunities for UK airlines, which they are well placed to exploit with their experience of operating in the private sector.
European liberalisation has already brought pronounced benefits both to users and to efficient airlines. In both international and domestic markets, liberalisation has helped to trigger significant increased competition. For example, 43 new routes are being served, and 38 routes are now supporting an increased number of competitors. I am pleased to say that about a third of the new routes are within or to the United Kingdom.
Customers enjoy wider choice and lower fares. Small independent airlines now have a genuine opportunity to compete by differentiating their product in terms of price and quality. The larger flag carriers that are the target of the increased competition benefit indirectly as the pressures of open competition breed a more commercial attitude and greater efficiency, making them more competitive in the world market. It is true that on some Community routes fares remain higher than users might like to see them. But providing air transport is a high-risk, capital-intensive operation and competitive services may take some time to emerge. The legislative framework within which competition can flourish is in place. We can look forward with confidence to increasing benefits from liberalisation as time passes.
Even in domestic markets, where so far only home-registered carriers have been entitled to compete, the third package has had a number of beneficial effects. In Spain, Iberia's dominance of the Madrid-Barcelona route has been challenged successfully by two small airlines, Air Europa and Spanair. Iberia's share of the domestic Spanish market has fallen from 100 per cent. in 1992 to below 80 per cent. now. In France, Air Liberté has taken on Air Inter on the Orly-Toulouse and other internal routes, with resulting falls in business and economy fares.
I stress again that it is the United Kingdom that has led the way in encouraging free and fair competition. It is instructive and encouraging that the UK register boasts

more privately owned international airlines than any other member state. From BA and British Midland down to the smallest company, each makes an important contribution to the wealth of the UK. They flourish because of the Government's pro-competitive and liberalising policies. They are carrying the message into the heartlands of their competitors, with companies such as Deutsche BA in Germany and TAT in France.
In 1987, as my hon. Friend the Member for Ruislip-Northwood said, we privatised British Airways. Today, as my hon. Friend observed, thanks to Lord King and Sir Colin Marshall, British Airways is widely recognised as about the most successful and profitable airline in Europe. By any standards, it is a major player on the global aviation scene. It has been the model for other European major carriers to follow. Moreover, British Airways has created jobs. As my hon. Friends know, the conventional wisdom in some European countries was that flag-carrying airlines had to be owned by the state and financed by it, to protect employment. British Airways has shown that that proposition was crassly erroneous. In the private sector, BA has increased its work force by about 35 per cent. over the past 10 years. As a result, it is employing more people than before privatisation, but at much higher levels of productivity.
It is worth saying that BA—the same can be said about British Midland, Virgin, Air UK and other operators—has achieved its pre-eminence without a penny of state aid or subsidy from the taxpayer. The BA example is clearly, however, the most spectacular. I am grateful to my hon. Friend for saying that state aid remains the greatest single threat to effective implementation of the single market.
State aid to national airlines has been an integral part of the aviation scene in several European countries for many years, yet it is entirely incompatible with the competitive regime that member states collectively have now established. If there is to be a genuine free market in air transport, the Community must put an end to the injection of public subsidies. They distort competition and penalise efficient carriers in countries that do not provide state aid. They perpetuate inefficiency and discourage innovation, to the detriment of passengers and business. There is no reason why taxpayers should subsidise airlines which, because of their inefficiencies, cannot survive in the marketplace.
As the House knows, the treaty of Rome puts the onus on the European Commission to control state aid. Over many years, we have been pressing the Commission to take a tougher approach towards member states that wish to continue paying outmoded state subsidies. Under the treaty, other member states have only limited powers to influence the Commission's decisions. The UK, however, has taken every opportunity to do what it can to ensure that state subsidies become a thing of the past. I can assure the House that we shall not weaken our efforts.
We have demonstrated our resolve, as my hon. Friend was kind enough to say, to tackle those issues head on by taking the Commission to the European Court over its decision in 1994 to allow the French Government to pay a £2.4 billion subsidy to Air France. Several European airlines, including British Airways and British Midland, have also challenged the decision. For the information of the House, the Government's case is currently stayed at our request, pending the outcome of the airlines' case. The Government had intervened in support of the airlines, and we hope that hearings will begin this year.


The Air France decision represented a major threat to liberalisation and to the interests of UK airlines. It was a massive injection of funds, equivalent at the time of the decision to about 60 per cent. of BA's market capitalisation. Aid on that scale could damage the European air transport industry for years to come.
United Kingdom airlines compete head on with Air France on several routes. They will be severely disadvantaged if Air France can reduce its prices or improve its quality of service as a result of state aid. United Kingdom airlines have to develop their networks out of their own resources. Air France's ability to maintain a wider range of services than it would without subsidy deprives efficient airlines of the commercial opportunities that they are entitled to expect.
Air France produced a restructuring plan to accompany the request for aid. We have grave doubts whether the plan can succeed. It was not based on cost reductions of the sort or on a scale that a loss-making private sector airline would put in hand. On the contrary, Air France intended to purchase a substantial number of new aircraft. That itself was unnecessary, and would have utilised funds that might have reduced the effect of the aid that was sought. A loss-making private sector airline would have to focus on its core activities if it wanted to achieve viability. The Commission's decision did not ensure that Air France financed as much of its proposed restructuring as possible by disposing of non-core assets, which is the obvious route that a private sector operation would take.
All in all, our view was that the Commission made a thoroughly bad decision, apparently without due consideration. We look to the courts to rectify the situation. Meanwhile, we are maintaining the pressure. Air France has realised its investment in Sabena and postponed some of its aircraft orders since the aid was approved. We have pressed the Commission to take that into account in deciding whether final payment of all the aid is justified.
The recent Commission decision to approve a £460 million payment to Iberia is the latest in a long line of disappointing decisions. The Iberia case is not directly comparable with that of Air France. The funding is not on such an immense scale, although it is still very large. Largely for geographical reasons, the immediate commercial threat to UK airlines is not so great. As the Commission has decided that the payment to Iberia is justified as a commercial investment by the Spanish Government as a shareholder, the case raises different issues.
The Commission says that the approved funding is not state aid. The effect, however, will be the same—to shore up an inefficient company and to distort consumer choice. It is the second large payment to Iberia—my hon. Friend drew attention to an extraordinarily large catalogue of payments—over four years. As my hon. Friend said, £670 million was approved in 1992. We are now faced with the latest payment. It is unfair to airlines such as British Airways, British Midland and other UK carriers that compete without subsidy.
We are especially concerned about the possible precedent that could be set for other state-owned airlines that might seek capital injections in future. We could not tolerate a situation in which state aid was allowed to pass

when dressed up as commercial investment, thereby circumventing the Commission's powers to disallow state aid under the treaty. That would undermine all our efforts to close the door on aviation subsidies. The Government have made clear to the Commission their views on that decision, and we are looking closely at its text to see what further options are open to us. My hon. Friend may be assured that the Government will act in whatever way is best to protect the long-term interests of the UK's aviation industry and, indeed, in a way that best promotes our objective of eliminating altogether state subsidies to airlines.
It is worth putting it on the record that not only state aid is a threat to liberalisation. As a few minutes remain, I shall, with my hon. Friend's indulgence, refer to one or two areas where it will be equally important to ensure that appropriate arrangements are in place. My hon. Friends will be aware of the importance, for example, of airport slots. It is unlikely that the growth in transport across the Community will be able to keep pace with the increasing demand for air travel, so congested airports will be increasingly common. We must ensure a fair and efficient system for managing airport capacity if the benefits of the liberalised market are to be realised.
Heathrow and Gatwick are respectively the first and fifth busiest airports for international traffic in the European Union, so the UK's airports have had a head start in developing processes for the allocation of take-off and landing slots. European law has already established the principle of a slot co-ordinator who is independent of airlines and the airport itself. It also gives preferential access for new-entrant airlines into the most congested airports, especially airlines that are willing to compete on monopoly or duopoly intra-Community routes.
The existing EC regulation is now due for review, and the United Kingdom Government are taking an active role in that process. Given the experience of three years' operation of the regulation, we are stressing the need first and foremost for its provisions to be properly implemented in every member state. In particular, that means that allocation decisions must be entirely free from interference by Government or any dominant airline.
We also believe that there is scope for the market to play a greater role in the distribution of slots. We acknowledge, of course, that a free-for-all auction would bring immense practical difficulties, but we are pressing for some trading of slots to be permitted between airlines once they have been allocated by the co-ordinator. That would tend to channel slots towards airlines that value them most, and strengthen the link between provision of services and consumer demand.
The second potential threat to liberalisation is air traffic control constraints, as delays add to the operating costs of airlines. Following UK proposals in the late 1980s, the European civil aviation conference launched initiatives to increase airspace capacity: through the establishment of European-wide flow management; by harmonising and integrating European air traffic management; and by increasing capacity in and around airports. In Europe, since 1990, air traffic control delays have halved in duration, while traffic has increased by an average of 5 per cent. a year. The United Kingdom wholeheartedly supports those initiatives.
Restrictions on the provision of ground handling services at Community airports are another potential brake on liberalisation. At some airports, monopolies run by the


airport authority or the dominant carrier provide inefficient or unduly costly services. We have therefore been a strong supporter of moves to open up the ground handling market.
We are pleased that the Community is close to adopting legislation to end monopoly arrangements and require all larger airports to permit potential suppliers of ground handling services to compete for contracts with airlines. Airlines will also have the right to carry out their own handling. Although the implementation of those measures will be phased in over a longer period than the United Kingdom would have preferred, they represent a positive step, to remove harmful restrictions. Opening up the ground handling market will provide the United Kingdom and other Community airlines with competitively priced and more responsive services, and will enable them to pass on those benefits to their passengers.
The United Kingdom aviation industry, the UK economy as a whole and UK passengers benefit, as my hon. Friend said, from a fully liberalised market in aviation. The Government therefore favour extending the single market beyond the borders of the European Community to other European states. Already, Norway is part of the liberalised arrangements, and negotiations are under way with Switzerland. We have said that we support a further extension to embrace the countries of central and eastern Europe, which in due course will lead to further opportunities for United Kingdom airlines and greater choice for users.

Mr. Wilkinson: I welcome what my hon. Friend is saying about the Government's strong desire to see an extension of liberalisation throughout the European economic area and, I presume, all European civil aviation conference member countries' jurisdictions as well. However, would it not be utterly wrong if the European Union were to arrogate to itself the right to negotiate air service agreements on behalf of its member countries, because that would create a dual situation in Europe, which could lead only to conflict and be to the advantage of the European economic area countries rather than those that are, like ourselves—for the time being at any rate—members of the European Union?

Mr. Norris: My hon. Friend reminds me of the important point that he made in his speech about who would negotiate in relation to third countries. My right hon. Friend the Secretary of State and, indeed, his predecessors, are absolutely clear that it is appropriate for

member states to continue to negotiate such matters unilaterally and that there is little to commend the proposition that services be negotiated at Community level by the Commission. I suggest that it is hard to determine the advantage, other than the theoretical advantage, which would accrue. The interests of member states, their relationship with third countries throughout the world, the history of that relationship, and the ties of language, tradition or custom may bind individual members of the Community, but there are areas that differ between member states. All that suggests that unilateral negotiation is infinitely preferred. My hon. Friend is right to make that point.
If the definition of subsidiarity is that the Commission shall do only that which the member state cannot better do itself, that proposition in relation to the negotiation of third-party agreements would appear to commend exactly my right hon. Friend's proposal, and I know that in due course he will wish to say more on that extremely important subject, where, sadly, our view and that of the Commission would appear to be at odds.
In conclusion, I merely repeat how pleased I have been to be able to debate this subject, however inadequately, with my hon. Friend. Some member states have not always been predisposed towards an open market in aviation, and the United Kingdom has a justifiably proud record in leading Europe down the path of liberalisation. The Community has made good progress in recent years in creating the legal framework for a single European aviation market, but opening up access to routes is simply not enough. We need to root out any obstacles to free and fair competition, and the greatest of those obstacles is state aid. The benefits of liberalisation will be seriously diluted if efficient airlines cannot fully exploit their competitive advantage because other carriers are bolstered by state handouts.
The Government look forward to the time when all member states accept that any form of state support to airlines is fundamentally inconsistent with the principle of the single market. United Kingdom airlines have prospered without receiving any form of state aid, despite facing unfair competition from airlines in member states that do. The Government are committed to seeing the end of those practices, and to seeing aviation services provided on a genuinely commercial basis.
I am extremely grateful to my hon. Friend for giving us the opportunity to debate this important issue, and I hope that he will have observed, from the clarity with which I am able to put forward the Government's position, that we take the issue extremely seriously.

Probation Service (South Yorkshire)

Mr. Michael Clapham: I sought this debate after meeting South Yorkshire probation officers about two weeks ago to discuss the operation of the service. I was accompanied by my hon. Friends the Members for Sheffield, Central (Mr. Caborn) and for Sheffield, Heeley (Mr. Michie). Since then, I have met probation officers to discuss subsequent developments.

Sir Irvine Patnick: I presume that that was a party caucus meeting; otherwise, I would have expected to be invited.

Mr. Clapham: It certainly was not. I thought that invitations had been distributed to Members from both main parties throughout South Yorkshire, and I am unable to elaborate on whether the hon. Gentleman received one—or, indeed, on why he did not receive one, if he did not.
It was clear from our discussion that the South Yorkshire probation service had responded positively to the challenges of recent years. I assume that the Minister has seen the service's annual report for 1994–95. If he has, he will have noted the increase in all aspects of probation work.
The number of pre-sentencing reports to the criminal courts has increased by nearly 15 per cent.; the supervision of offenders given community sentences has risen by 18 per cent., nearly twice the increase in 1993–94; there has been a 17 per cent. increase in the amount of automatic conditional release work; occupancy of bail hostels has risen by 10 per cent., and demand for welfare reports in the family courts has increased by 3.5 per cent. There has clearly been a dramatic rise in the work of the South Yorkshire probation service.
Impressive though those figures are, I must emphasise that the organisation aims not just to achieve numerical volume but to provide an efficient and effective service. What is not evident from the figures is the commitment to developing work programmes for specific groups of offenders that are intended to deal with certain types of offending behaviour. I think that the Minister will agree that that is an important development—a development that has taken place not just in South Yorkshire but throughout the probation service.
The South Yorkshire probation service's main function is the supervision of offenders on community orders, with the aim of preventing reoffending. In that way, the service makes a positive contribution to the community, ensuring public safety and strengthening ties. It works not in isolation, but in the community. Officers constantly interact with offenders who, while conscious of their actions, are not always conscious of the consequences of those actions. Those who have decided to change the qualifications for probation officers do not seem to have taken that on board.
Probation work is done in a social context. It is a complex process, often requiring the fixed ideas of offenders to be broken down so that they can be integrated and can live with others in harmony, without causing the problems that led to their initial contact with the probation service. Such a complex social process requires mature

officers with good education and a good training; it requires the understanding that mature recruits bring to the job.
That understanding, however, needs to be underpinned by education and training of a high standard. I believe that the necessary educational qualifications should be gained in universities, which can provide theoretical knowledge that can then be linked to practical skills.
The South Yorkshire probation service feels that the abolition of the requirement for people to hold diplomas resulting from a two-year course in social work or its equivalent before they can be appointed as probation officers amounts to deskilling. I agree. I do not believe that the proposals for in-service training will provide the necessary combination of theory and practice. Even at this 11th hour, I ask the Minister to consider implementing a new two-year diploma course. If he cannot do so, he should at least be able to tell us that he is prepared to review the matter again with the Central Council for Education and Training in Social Work.
I am aware that the National Association of Probation Officers referred the whole matter of training to a judicial review. That review did not fully support NAPO's contentions, but I understand that the judge said that there was now a void, and that there should be appropriate educational and training qualifications for probation officers. Perhaps the Minister will expand on that.
According to the Dewes report, which was commissioned by the Government, the diploma in social work inhibits the recruitment of potentially valuable probation officers. The figures show, however, that the service is not losing nationally or regionally: it is obtaining mature recruits. In 1993, more than 50 per cent. of recruits were over the age of 30, and more than 40 per cent. had previous work experience. Perhaps the real disincentive has been caused by the fact that, in 1994, the Government cut £17 million from the probation service's education budget, thus reducing the number of available places.
Why, the South Yorkshire probation service asks, do the Government want to dismantle the current system of education and training, which is supported by NAPO and the Association of Chief Officers of Probation? The Industrial Society found its training and recruitment methods very effective.
It would seem—no doubt the Minister will expand on this—from leaks in the media that the Government wish to dismantle the probation service qualification, so that they can recruit more ex-service men and women, in the belief that they will instil more discipline. If that is really their objective, it results from a mistaken view of the probation service's work—like the belief that recruits do not require theoretical knowledge.
I again draw the Minister's attention to the fact that probation officers work with drug addicts, with people who are responsible for sexual abuse, with people who have been involved in family violence as well as family breakdown, and with the mentally ill. There is a need for a great deal of understanding, and that comes from an educational qualification steeped in much of the theory that applies to social work. Such education, linked to practice on the job, can provide the necessary skills to enable a probation officer to work well in the community.
Another reason why the Government want to dismantle the probation service came to the fore in an announcement only a week or so ago. The Guardian carried the headline


"Probation Pay Linked to Crime". I do not know whether the Minister saw that article, but he will no doubt be aware of the proposal for a pay-related bonus system. Probation officers in South Yorkshire feel that that would devalue the service. As we are now aware, the Home Secretary seems to be seriously considering the introduction of what I would refer to as a ludicrous performance-related pay system, which is linked to whether a probation officer's clients reoffend.
That barmy idea was proposed for the police force and withdrawn. The work that a probation officer does, to which I have referred, is even more complex, and a pay-related system would lead to all kinds of problems. It is an absolutely ridiculous idea, and would result in probation officers recommending for supervision under community orders only offenders they judge are least likely to reoffend. That would be the obvious way to ensure that they would receive their bonuses.
Those people who had been to prison or had a record of reoffending would not be recommended for community service. The system will ultimately lead to reduced pay levels in the service, which will deter the high-calibre recruits currently joining it.
I ask the Minister to reflect on the system's ultimate results. Are we saying that judges will be on bonus-related pay, and that their payment by results will be related to the length of sentences they impose? If that increased, as it ultimately would, the prison population, would prison officers be paid more to supervise the rise in the prison population? If so, are we to say that they are likely to receive decreases in pay if the prisoners they have been supervising were to reoffend? On reflection, I am sure that the Minister will agree that introducing a bonus-related pay system in the probation service is ludicrous and barmy.
As I am sure the Minister will be aware, there has been a fall in recorded crime of 2 per cent. in South Yorkshire. Burglary overall has fallen by 11 per cent. There was a fall of 1 per cent. in violent crime, and there has been a fall of 10 per cent. in the number of sexual offences. Those figures reflect in part—I emphasise, in part—the effectiveness of the South Yorkshire probation service. I say "in part" because I am aware that other agencies are involved in those welcome statistics, such as the police and the social services.
The probation service approach to offenders really works. There is a mountain of evidence to support that contention, but I shall use only two examples.
A cost-benefit analysis of probation-style programmes in America showed that the net saving of such programmes was $68,000 per offence. A study in the United Kingdom in 1993 followed a group of young offenders who had taken part in an intensive probation programme and compared them with a group of offenders who had been given custodial sentences. It showed that the volume of reconvictions of those given custodial sentences was 100 per cent. higher than for those who had undertaken an intensive probation course. The probation service approach is successful.
The whole approach could be undermined by an inadequate training system and a barmy payment-by-results system. The probation officers in South Yorkshire are extremely concerned by the Government's proposals—or should I say lack of them—on adequate education and training. They feel that the service will be

deskilled. Moreover, they are worried that the proposed payment-by-results system will devalue the service, and that the ultimate loser will be the community. I share those fears.
The Government's ill-conceived proposals will undermine the confidence of the professionals in the service and be to the detriment of the community. I therefore urge the Minister to think again, and to work with probation officers, chief probation officers and the Central Council for Education and Training in Social Work to arrive at a satisfactory solution to the education issue. I urge him to drop the barmy idea of putting probation officers on a payment-by-results system.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Tom Sackville): I welcome this opportunity to reply to the hon. Member for Barnsley, West and Penistone (Mr. Clapham), and I pay tribute to the South Yorkshire probation service and its work, and to the probation service as a whole.
We in government fully recognise the tremendous contribution that the probation service makes. The criminal justice system is clearly not all about prison. Many offenders, as the hon. Gentleman said, will very much benefit from a community sentence. That is central to our policy. We are very well aware that the probation service faces a greater and greater challenge, and I am glad to say that its overall resources have remained in real terms at a consistent level, which reflects our attitude.
What the hon. Member said about training is very important. My right hon. and learned Friend the Home Secretary's decision last year to withdraw the requirement for a two-year social work degree has been misinterpreted, and misrepresented widely. It has been said, as it has again in this debate, that the decision represents deskilling. I reject that claim altogether.
We believe that we need very much more broad-based probation training in order to face the challenge of today's crime scene. No one would deny that social work is relevant to probation work, or that any new training scheme introduced should contain an important element of social work training, but other disciplines are equally important. Probation should be seen as a discipline in its own right, and any training scheme must incorporate all the relevant skills—whether in criminology, sociology or psychology—and expert knowledge that is required.
The hon. Member said that working with drug offenders is very important. This morning, I launched the south London drug strategy, which will involve a great deal of work by a number of professionals—including social workers and probation officers—in arrest/referral schemes. We must make sure that we can offer people who are passing through the criminal justice system—at the time of arrest, in court or during community sentences—the support they need to get off drugs. In doing so, we can reduce crime. That area formed a much smaller proportion of the work of the probation service five or 10 years ago.
We propose that the training and qualifications for probation officers in the future should contain all those elements, and should not be dominated by one particular discipline or by those with university qualifications. The training should be composed of the elements that the service believes are needed. The service should design the


course, which should contain enough flexibility to ensure that all the necessary elements are included. I hope that the negotiations will go ahead, and there is a meeting today between the Home Office and the profession. With good will on all sides, I am certain that the Home Office, the employers and managers of the probation service and higher education can come up with a course that reflects the needs and challenges of today.

Sir Irvine Patnick: May I join the Minister in praising the work of the South Yorkshire probation service? He may be aware that I made representations on behalf of that service to the previous Minister, and that those representations were considered before the changes that took place in the probation service. I am grateful for that, and I wonder whether my hon. Friend would like to comment.

Mr. Sackville: I am grateful to my hon. Friend for that intervention. We need a relevant professional training qualification. The hon. Member for Barnsley, West and Penistone pointed out that the present system has attracted many mature people to the service, but we should not get carried away with the idea that we are trying to attract large numbers of ex-service men, who may or may not have relevant experience.
There is a strong argument that telling someone who wishes to join the service and who has relevant experience—someone who has worked with young people or has done a variety of work in the field—to undertake a two-year social work course could be a considerable disincentive. That is not the case for everyone—many people who are highly qualified and suitable for the service may be happy to get the degree.

Mr. Clapham: The probation service has experienced no difficulty whatsoever in attracting the kind of recruits it requires. We are not talking about apprentices, or about people who work with mechanical parts. We are not talking about people who work with widgets. We are talking about training for men and women who are to work with people. They will need a theoretical education to underpin the skills they will require to work with drug abusers and sex offenders.

Mr. Sackville: The hon. Member ignores this fact—there is no reason why all the theoretical knowledge could not be gained within a more flexible framework. It will be up to the probation service, in conjunction with all other concerned groups, to design relevant courses that contain all these elements. All that we are saying is that a two-year social work degree should not be compulsory.
I am convinced that certain qualified and suitable people will be put off if they are told that they have to take a two-year social work degree. Many people may

need social work training, but not necessarily the full social work degree. I think that that was the burden of the earlier remarks of my hon. Friend the Member for Sheffield, Hallam (Sir I. Patnick).
The hon. Member for Barnsley, West and Penistone also mentioned performance-related pay. Again, this matter has been widely misconstrued—including in the article to which he referred. The background is that a Home Office options paper was put to the employers' side of the joint negotiating committee. It made no specific proposal, and certainly did not specifically propose that performance should be linked specifically to reoffending. That would be difficult, and would be a caricature of any sensible performance system.
Some unnecessary fears have been expressed about the subject. It will always be up to the employers and local committees to decide on the nature of any performance-related scheme. All services should already be using the standard competence-based appraisal scheme that was introduced two years ago with the backing of all concerned. If properly used, such a scheme should provide an objective way of assessing and comparing performance, and it was designed to bear the weight of performance-related pay if necessary.
There are many ways of assessing performance—timeliness in producing pre-sentence reports; timeliness in producing welfare reports in family court cases; quality of pre-sentence reports; and compliance with national standards. There is no reason to caricature the proposal as in some way linked to a raw measure of reconviction. The hon. Member for Barnsley, West and Penistone's rather absurd analogies with judges and other parts of the criminal justice system did not add to the argument.
I accept the closing remarks of the hon. Member for Barnsley, West and Penistone. Probation and the probation service do work, but they work alongside other aspects of the criminal justice system. Probation is not a substitute for prison. Given that the reconviction rate is about 50 per cent., we must assume that the reoffending rate—whether for those leaving prison or those who have gone through community sentences—is considerably higher.
That is an argument for the fairly robust line taken recently by my right hon. and learned Friend the Home Secretary, who has recognised that—in cases of burglary, for example—very short sentences are passed from time to time on people who have offended and been convicted many times. There is room within the criminal justice system for an effective probation service, and we must make sure that the public are protected by taking those who persistently offend out of circulation.
We very much value the work of the probation service, and we hope that the present disagreement about the future of the probation training qualification—it has been going on for some months—will be resolved. There is no reason why we cannot find a flexible scheme that satisfies all sides and ensures that the probation service continues to play a vital part in our criminal justice system.

London Electronics College

Sir Nicholas Scott: At a time when images of Culloden pour from our screens and appear in our newspapers and other journals week by week, it may be that it is another lost cause that I espouse in this brief debate this morning, in which I look forward to the response of my hon. Friend the Under-Secretary of State for Education and Employment.
The London Electronics college in my constituency was founded in 1892 as the British School of Telegraphy. Although it did not invent the morse code, it was the crucible within which morse code was developed and expanded across the world. Morse code became a method of communication which saved many lives in the course of the century which divides us from the beginnings of the British School of Telegraphy. Morse code has now been largely supplanted by other means of communication on land, sea and air, but it still exists in a reduced state in different parts of the globe. The London Electronics college has in the 104 years which separate us from its founding played its part in those events, but more recently has devoted its attention to the development of courses in electronic engineering. It has been a leader in the provision of such courses to a considerable number of students, both students from overseas who come to learn and develop their skills here and our own young and not so young people who wish to acquire skills in electronics which they can bring to bear in their own commercial and industrial futures.
In the past few weeks we have discovered that no new contract is to be given to the London Electronics college for its development of electronic engineering skills. The college faces in the next 12 months a progressive winding down of operations in Penywern road and, unless fresh thought is given to the issue, closure. My case for the college rests not on some sentimental adherence to the past but on the important and crucial role that I believe that it may be able to play in the future.
Last year it was my privilege to visit the college and see the exciting work that was being conducted there and the commitment not only of the students aiming to develop their skills but of the staff and management, who have devoted themselves to improving and developing steadily the teaching and output of the college.
We all know how immensely important the future of engineering and perhaps particularly electronic engineering is to the commercial future of the country. My hon. Friend the Minister for Science and Technology was recently keen to stress the importance of encouraging high calibre young people to take up careers in engineering, including electronic engineering, and he has been instrumental in introducing into our schools schemes, such as the engineering education scheme and headstart, to encourage young people within the mainstream education system to take an interest in and develop an enthusiasm for engineering. That is an admirable, indeed essential, part of our commercial and industrial future.
We now know not only that the London Electronics college faces closure in the not-too-distant future but that, as the principal of the college wrote to my right hon. Friend the Deputy Prime Minister about four weeks ago in response to a speech by him on the engineering profession:

All technician training in London has effectively been closed down by Centec"—
the training and enterprise council responsible for training in central London—
and there is now no GNVQ advanced engineering or NVQ electronics servicing training by any of the eight London TECs provided within the national adult retraining programme commonly known as TFW.
Coincidentally but distressingly, that decision was announced during national science, engineering and technology week. One hopes that the Government might rather better co-ordinate some of their decisions in this important field.
The London Electronics college is a major part of the system in London for the development of electronic engineering skills. The clouds are gathering over its future. None of the fault can be laid at the door of the management or staff. There is no lack of applicants to take up places on the courses in the college. Complicated administrative reasons play some part. They involve first the Government, who operate mainly through the Government Office for London, then Centec—the organisation responsible for training across a range of skills in inner London—and the London Electronics college at the end of the process.
The chief executive of Centec is Mrs. Gwyneth Flower, a lady for whom I have considerable admiration. I have watched the enthusiasm that she has brought to her task. In a letter to the London Electronics college in the middle of last year she set out the reasons why clouds were beginning to gather, even then. She said:
Firstly, the category of trainees for which we are responsible are defined by the Government and are as follows: those six to 12 months unemployed, those 12 to 24 months unemployed, those with more than 24 months unemployment and those with special training needs. Between Government and ourselves we have to attempt to forecast the number of trainees in each category over the year in order to establish our average contract value. Each of the above categories is paid for at a different rate and you will see that this leads to a fairly complicated situation which has a major influence on our contractual flexibility"—
that is to say their ability to provide what people who are out of work need in order to acquire the skills necessary to return to productive work.
Mrs. Flower went on to say:
I wish to make the point that it is Government policy to emphasise the delivery of jobs from TEC training programmes and, as a consequence, the value of a higher education qualification has been reduced from four to two points"—
that is to say in assessing the performance of the providers. She continues:
This is not of our making; it is part of a Government requirement placed upon us. While we may protest about this, the requirement remains.
If we are looking ahead to our future in the business of electronic engineering, the continued provision of high-quality skills will lie at the core of what we all, if we look at it in a rational way, should endeavour to produce. In essence, we are taking too short-term a view of the development of skills in what I reiterate will be an important part of our future commercial success.
We have reached the point where no training and enterprise council offers advanced engineering training for adult retraining in the London region. Last month, Centec cut all training provision by one third with only two weeks' notice. TECs are influenced—"encouraged"


may be too strong a word—to place payment emphasis and recruitment on job outcomes, not on national vocational qualifications or on higher education. I believe that that is a short-term way of looking at this area of activity.
I understand that some TECs are now paying commercial recruitment agencies to obtain jobs for them, which would have been obtained by applicants anyway. Agencies are then double funded—by employers and by TECs. I am also told—the Minister can confirm whether this is true—that some recruitment agencies have been making special deals with his Department to get this funding.
TEC funding is not going to the long-term, high-quality training that ought to be our first priority in this important area. As I understand it—I have no reason to doubt the information that I have been given—in order to achieve the training outcomes set by the Government, emphasis is increasingly being given to things such as low-level keyboard skills or to what is called, in the jargon of the trade, training hamburger flippers—that may be an overstatement. There is a reducing emphasis on high-quality skills and an increasing emphasis on low-level skills that can produce the right figures but do not underpin our industrial success for the future.
Our jobless youngsters deserve better than this. Young people who have been unemployed for more than six months undertake low-level training schemes that have a low skill requirement and they receive short-term training. They then go back on the register. That may do something to reduce the number of people on the unemployment register at any particular time and it may help to keep those figures down, but our young people deserve better than that. They ought to have the opportunity to acquire higher skills that not only provide them and their families with proper levels of remuneration but underpin our success in these areas for our industrial future. I am sure that our future prosperity depends on a better answer than the one we have at the moment in the training area. The London Electronics college provides that. It would be a tragedy if it were to close.

Sir Norman Fowler: I endorse the remarks of my right hon. Friend the Member for Chelsea (Sir N. Scott). I know of the high reputation of the London Electronics college and I was appalled to hear that no new contract will be forthcoming, as was mentioned by my right hon. Friend. First, I was the Secretary of State for Employment who introduced training and enterprise councils. The idea was to get away from the kind of bureaucracy that had harmed training in this country for quite a number of years. We had a so-called national training system that was far too bureaucratic, that was not owned and that was entirely ineffective.
The aims of the training enterprise councils were that they should be owned locally, that they should be flexible, that their training should be relevant to the people living in the area, that the public sector should be involved and that we should train people with skills and for skills. I am bound to say that I have been concerned about the complaint after complaint—my right hon. Friend graphically illustrated this in the letter that he read out—

that I have heard about what I would call a creeping bureaucracy coming back into the training and enterprise council system. If that is so, it is certainly not what was intended. I hope that the Government will look at the points made by my right hon. Friend in this respect.
Secondly, the aim of the training and enterprise councils—indeed, the aim of any sensible training system—is to train people in skills. It is important that there should be a job for people at the end of the day, but one cannot have a training system entirely plugged into the employment market in every respect. It may be that in some areas training—for example, training at the London Electronics college—will lead to higher education and further training. One should not turn one's back on that.
I am concerned with the issue that my right hon. Friend has raised. There are signs that the new training and enterprise council system that the Government introduced to get away from the national bureaucracy of the old Manpower Services Commission and all that that entailed is being slightly misused. I hope that the Government will be able to give some indication that the future of the London Electronics college will be looked at again and that a better solution will be found.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice): I am grateful to my right hon. Friend the Member for Chelsea (Sir N. Scott) for initiating the debate. He has shown considerable diligence in this matter over some months. He raised the issue in a letter to the Secretary of State. Obviously, he is concerned about the future of the London Electronics college, which is in his constituency. I preface my remarks by making it clear that it is primarily a matter for the parties concerned. I shall address the points raised by my right hon. Friends the Member for Chelsea and for Sutton Coldfield (Sir N. Fowler). The detail of the contract is a matter for the parties concerned.
The college has been a Central London training and enterprise council provider for the last four years. The use of the name "college" does not mean that it is necessarily part of the further education sector or that it is a formal college under the local education authority. It is a wholly private organisation—Government Members would not expect me to suggest that that is a criticism; I am putting the matter into context.
The college has been a Centec provider for the last four years and it has been providing courses in a number of areas related to electronics, engineering and applications systems. It has offered national vocational qualifications at levels 2, 3 and 4. The college has been successful in meeting the targets set in its contracts for the number of trainees achieving NVQs—in fact, 38 per cent. of the trainees obtain an NVQ.
However, the college has been unsuccessful in meeting the targets for the number of trainees who leave training and then enter employment. That is now the key performance indicator under training for work, to which my right hon. Friend the Member for Chelsea referred. My figures show that only 4 per cent. of its trainees obtain jobs at the end of their courses, compared with the national target—and achievement—of close to 45 per cent. That is a clear difference in achievement—it is not a matter of a few points.
My right hon. Friend also referred to the issue of training and its relationship to jobs. Of course, training must not be wholly related to the jobs that exist at the


time. However, it is equally true that training cannot take place in a vacuum away from the labour market. Obviously, I pay immense tribute to my right hon. Friend the Member for Sutton Coldfield for introducing TECs with a considerable amount of vision.
My right hon. Friend the Member for Sutton Coldfield will recall my humble membership of the Employment Select Committee at that time and the considerable enthusiasm that its Conservative members had for his proposal. The development of TECs is a great change in the delivery of training. One of their principal duties is to examine the local labour market and ensure that the training that is provided relates to its needs. Clearly, it is important that the training for which TECs contract relates to local needs, where real jobs exist.
My right hon. Friends know that TECs are, rightly, independent companies led by local business people for the reasons that my right hon. Friend the Member for Sutton Coldfield described when he set them up. They work under performance-related contracts with Government and their mission is to provide the country with the skilled and enterprising work force that it needs. There can be few hon. Members who would dissent from that mission.
Each TEC agrees a corporate plan with the Secretary of State in line with cross-Government strategic guidance and an economic assessment of the needs of its area. Those corporate plans are publicly available and form part of longer-term, three-year licensing arrangements. We are coming to the end of the first phase of the licensing programme because the majority of TECs now have three-year licences. Each has a duty to secure value for money and to maximise performance. They have a duty in respect of, and are accountable to this House through me and my right hon. Friend the Secretary of State for, their guardianship of public funds.
Ultimately, it is not the future of individual training providers that matters—over time quite a number have closed their doors for various reasons—but future adequate provision for the labour market and for all potential students who wish to undertake some form of training. I entirely share the enthusiasm of my right hon. Friend the Member for Sutton Coldfield for the concept of TECs and his concern about the rumours of what he called "creeping bureaucracy". There is no doubt that some training providers are concerned about that. My right hon. Friend may know that an efficiency scrutiny of the Government's relationship with TECs has recently been undertaken. A 40-point plan came out of that and we have rejected only two of those points. Almost all of them were implemented at the beginning of April. One or two of the bigger points will take until next April to implement.
There is also some concern—I have raised this with TECs and we are taking it forward—that some bureaucracy has been generated, not by Government but by individual TECs. We must tackle that. Putting my tongue in my cheek, I could say that the price of setting them up as independent companies, as my right hon. Friend the Member for Sutton Coldfield rightly did, is that I have that much less control over what they do. However, I am anxious to address the problem of bureaucracy.
The performance of every TEC is kept constantly under review and we publish each autumn tables comparing achievements that relate especially to the annual contract

with my Department. As part of those negotiations, we expect that in the current year 197,000 training opportunities will be provided under training for work, which will lead to 45 per cent. of those trainees obtaining jobs. I emphasise the difference between that 45 per cent. and the actual achievement of the London Electronics college.
My right hon. Friends will no doubt be aware of this morning's excellent news that unemployment has fallen yet again to 7.8 per cent. of the population. That is an important factor because it underlines the Government's belief that the principal responsibility for training, especially to higher level skills, to which my right hon. Friend the Member for Chelsea rightly referred, must lie with employers. The Government cannot be expected to provide all the training that may be required by employers.
We believe that training for work should be focused on getting unemployed people back into the work force and doing something useful. Although my right hon. Friend the Member for Chelsea referred to hamburger flippers and low-level skills, that is not the objective of training for work—although there are some service jobs that may fit that description. We want people to get back into work and, once there, for employers to shoulder the burden of improving and developing their skills. We have ample evidence that that is happening. The surveys that came out this morning with the unemployment figures show that employers are expecting, yet again, to increase their investment in training.
I shall now deal with the specifics of the London Electronics college. I understand that Centec, the TEC that covers the area, reviews the performance of all its training providers as part of a continual examination and review of its training strategy. We all appreciate that it is important for it to review its contractual partners and, where necessary, to make changes. As a result of that, Centec decided not to contract with the college this year.
My right hon. Friend the Member for Chelsea made two suggestions that he believed to be correct. I think that they are both wrong but I will check them. He first suggested that Centec cut its training for work programme by a third at two weeks' notice. Colloquially, I may say that it is news to me if it did; there would be no justification for that. The Government have not cut training for work by a third and certainly not at two weeks' notice. Our plans for training for work for the coming year were published in the public expenditure survey at the end of November last year. I do not believe that Centec would have had any justification for doing that. I would therefore be very surprised if it had done it.
My right hon. Friend the Member for Chelsea also referred to the suggestion that recruitment agencies operate to get people into work and that there may be special deals with my Department. Certainly, there are no special deals with my Department. As far as operations with TECs are concerned, I cannot say that categorically but, again, I would be surprised if that is happening. I would be very disappointed and would wish to investigate the matter further. As far as the Department is concerned, it is not happening.
I know that Centec has been in discussion with the college and that they have discussed how the college might attract alternative funding. I was concerned when I read the information about the college to find that more


than 90 per cent. of its funding is from contracts with TECs, principally with Centec. That is a very high proportion of its eggs in one basket.
Alternatives may be possible. For instance, the college may wish to consider the possibility of funding from the Further Education Funding Council as an external institution. The council may provide funds to institutions and bodies outside the further education sector for provision that falls within schedule 2 of the Further and Higher Education Act 1992 and where the council can be persuaded that existing provision is inadequate. Currently, applications for council funding by external institutions must be sponsored by an institution in the FE sector. The Government have already made it clear in the last competitiveness White Paper that we intend to remove that requirement, but it exists at present.
Ultimately, as my right hon. Friend the Member for Chelsea said, we must be concerned about where people will get training in future. In the past 24 hours I have carefully examined what is available in central London. Several FE colleges serve the area—Southwark, Lambeth, City of Westminster and Hammersmith and Fulham. They provide a range of full and part-time electronics and

electrical engineering courses. It will be for the FEFC to decide whether there is a need for further provision. If it did so decide, it could fund it.
I shall not bore the House by going through the substantial list of courses that are currently provided in the area that my right hon. Friend represents. Alternatives are already available. That undermines the statements made by the head of the college in the letter to my right hon. Friend the Deputy Prime Minister, to which I know he will respond shortly. There is clearly alternative provision. Despite that, the college may wish to consider approaching FE sector colleges in its area with a view to seeking sponsorship for funding in the year to come.
I know that my remarks will not have brought all the help that my right hon. Friend the Member for Chelsea wished for. I am sorry that I am unable to be as helpful as that, but I hope that I have explained some of the background and, most importantly, that there is alternative provision. There is scope for the college to consider other ways forward and I hope that it will do that.
I hope that I have convinced both my right hon. Friends that there is a considerable amount of good work happening in the TEC movement, for which we all wish to pay tribute to its progenitor. I thank my right hon. Friend the Member for Chelsea for raising the subject.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — TRADE AND INDUSTRY

Small Businesses

Mr. William O'Brien: To ask the President of the Board of Trade what assistance is given by his Department to help small businesses; and if he will make a statement. [23915]

Mr. Llwyd: To ask the President of the Board of Trade what proposals his Department has to assist small and medium-sized businesses; and if he will make a statement. [23921]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): The Government recognise the crucial role played by small firms and aim to assist them by keeping inflation and interest rates low and by reducing legislative, administrative and taxation burdens. A range of measures and schemes has been introduced to help small firms, in particular, the network of business link one-stop shops of which there are now more than 200 in operation.

Mr. O'Brien: Is the Secretary of State aware that in the recent referendum of small business people, 75 per cent. asked for competition in the installation of water meters and public utility services? Is he also aware of the anger and frustration that late payments have generated in the world of small business? Will he stress to his Cabinet colleagues the need for early legislation to help small business people in their campaign for fairness over late payments?

Mr. Lang: We are still on question No. 1, Madam Speaker, and question No. 2 deals with late payments, but since the hon. Gentleman started with a reference to referendums, I must point out that the majority of small business organisations are against statutory arrangements to deal with the late payment of debts. I warmly welcome the conversion of some Labour supporters to the importance of competition in the provision of goods and services. Competition has led to improved efficiency in electricity and the substantial reductions in gas prices in recent years.

Mr. Llwyd: Is the Minister aware that the latest European Business Monitor survey shows that two thirds of businesses monitored are of the opinion that economic growth will come from small and medium-sized enterprises? Given their important role in the economics of the United Kingdom, when will he offer some practical help? It is all very well talking about interest rates, and so on, but more important things should be done. What about the crippling effect of business rates on smaller businesses? What about the burden of value added tax? What about assisting small businesses to expand and take on new trainees and so forth? When are the Government going to do something and not just talk?

Mr. Lang: The hon. Gentleman does not know what is going on in the world. The Government long ago recognised the importance of small businesses in

generating employment and economic activity. Unlike the Labour party, we have identified and implemented specific measures to help. The hon. Gentleman mentioned VAT. He may not realise that the VAT threshold was increased again in the last Budget; it is the highest in the European Union and has exempted 75,000 companies from VAT. He may not be aware of the changes made in auditing requirements, capital gains tax and inheritance tax, and the reduction in small firms' corporation tax. The Government have identified the problems of small business and found measures to help.

Sir John Cope: My right hon. Friend did a good job in organising the "Your Business Matters" conferences throughout the country, which concluded last month. Several important proposals came out of those. Can he tell us any more, particularly about the proposals to streamline local authority registration and controls on fire, planning and so forth into a one-stop shop affair and about single registration of new companies for income tax, VAT and other things?

Mr. Lang: I am grateful to my hon. Friend. That was an extremely successful series of conferences at which the Government consulted very closely with small businesses all round the country. A number of measures were announced by my right hon. Friend the Prime Minister at the final conference in London, including the streamlining of development controls, new rights in enforcement actions, and single notification for tax and national insurance arrangements for new businesses. In addition to those welcome measures announced at the conference, we made it clear that further announcements and a response to the input from all the conferences will be published with the competitiveness White Paper in June.

Mr. Dover: Is not the acid test how many small businesses are formed? Did not the number of small businesses grow from 2.5 million to 3.5 million between 1979 and 1993, showing the confidence that firms have in setting up under this Government? And did not the number of company insolvencies fall by 13 per cent. last year compared with the previous year?

Mr. Lang: My hon. Friend is right on both points. Between 1979 and 1993 the number of businesses in this country rose by 50 per cent.—an increase of 1.2 million—and it is clear that under this Government opportunity for enterprise, the building up of economic activity and the creation of small businesses has been greater than ever before.

Mrs. Roche: How can the President of the Board of Trade be so complacent about small firms and late payments in view of the Government's record? Whenever a survey on the statutory right to interest is conducted in the small business community—such as that conducted by Lloyd's Bank—such a right is overwhelmingly supported and 65 Conservative Members have signed an early-day motion supporting Labour party policy. How can the Minister be so complacent about the Government's record on small businesses when he now proposes to exclude more than 100,000 small catering firms from the loan guarantee scheme? Does not that proposal expose the gap between Government rhetoric and reality?

Mr. Lang: The hon. Lady is quite wrong. The loan guarantee scheme has been redesigned and extended in


some important ways, but we are also avoiding displacement of existing economic activity by that scheme. On late payment of debts, the hon. Lady may like to know that eight out of nine business organisations are opposed to the introduction of statutory interest payments on late payment of debts. Government policy such as the requirement to disclose payment policy has been warmly welcomed and we are now consulting on disclosing payment practice. We are encouraging and are signing on for the Confederation of Business and Industry code of payment conduct. It is important to change the culture in relation to late payment of debt, because no amount of legislation will succeed unless the culture changes. That is what is happening under the Government.

Mr. Congdon: Is not the best assistance to small businesses the continuation of economic policies that have led to the creation of a stable macroeconomic framework, which has today led to a further reduction in unemployment of nearly 26,000 people? Is that not the right way to achieve benefits for small businesses, rather than imposing burdens on them such as the social chapter and the minimum wage?

Mr. Lang: My hon. Friend is absolutely right. Like him, I warmly welcome the further fall in unemployment this month of 25,700 people. Unemployment has now been falling at an average of 10,000 people per month and is now very substantially over 3 percentage points below the European average. My hon. Friend is also right to identify what would be the cause of job losses in very large numbers: the social chapter and the national minimum wage, which are policies supported by the Labour party.

Ms Lynne: To ask the President of the Board of Trade if he will list the recent meetings he has held with representatives of small businesses about late payment of commercial debt.[23917]

The Minister for Small Business, Industry and Energy (Mr. Richard Page): The Prime Minister, the President of the Board of Trade and I were all present at the national "Your Business Matters" conference on 11 March, which was attended by representatives of all the major small firms organisations. A number of important issues were raised, including the late payment of commercial debt. In addition, I have recently consulted all the small firms' representative organisations on late payments and legislation for a statutory right to interest. The outcome will be published soon.

Ms Lynne: Is the Minister aware that some small businesses in Rochdale are facing increasing financial difficulty because of late payment of debt by many companies and by Government Departments? We know that he is currently consulting small businesses. If that consultation reveals that small businesses are in favour of interest being paid on late payment of debt, will the Government introduce legislation to make it possible?

Mr. Page: I have to put it delicately to the hon. Lady that she is labouring under a misconception. The problems being experienced by small firms are not caused by their not being paid by large firms. Research has shown that in fact the problem is that small firms are hitting other small

firms. Research by Professor Wilson of Bradford university, which is to be published shortly, will confirm previous investigations. He found that the problem is caused by small firms themselves. He also concluded that some 40 per cent. of small firms do not undertake proper up-front credit control and that the companies which do have proper front-ending credit control have a 35 per cent. better chance of being paid promptly than those which do not. Small firms therefore have a management responsibility, too.
In specific response to the hon. Lady's question, consultation is under way. I shall be announcing the results shortly and any decisions will flow from those results.

Sir Michael Grylls: Does my hon. Friend agree that most small firms want less rather than more legislation and that they do not want legislation on the payment of debts? Does he agree that it would be much better to make public companies state in their accounts what their payment policy is and how promptly they pay their bills? Should we not get the Government and local government to pay small firms promptly? If that could be arranged, would not the problem largely be solved?

Mr. Page: As my right hon. Friend the President of the Board of Trade said, eight out of nine of the small firms' representative organisations have stated that they are against the introduction of a statutory right to interest on commercial late payment. I shall have to take that into account in evaluating the consultation.
As for payment practice and payment policy, it has already been agreed that public companies will have to put payment principle in their annual accounts. The Prime Minister has asked that consultation take place on payment practice, and I believe that is to happen in the next month or so.

Mr. Gunnell: A number of small firms in my area contributed to the consultation on the Latham report and wonder why nothing has happened as a result. Is the Minister promising legislation? Companies in my area think that the Government have been dilatory in this respect. They wanted something to happen urgently. They submitted evidence and the report was published, but nothing happened.

Mr. Page: I can give the hon. Gentleman some very good news. The Housing Grants, Construction and Regeneration Bill currently going through the House of Lords will for the first time introduce a proper payment practice for firms in the construction industry. It will prevent the pay-when-paid scandal and help small businesses immensely. It is a positive move in the right direction.

Mr. John Marshall: My hon. Friend referred to a recent meeting that he had with small business men. How many of them asked him to sign up to the social chapter and a national minimum wage or recommended that people earning £35,000 a year should pay more income tax?

Mr. Page: I have to chide my hon. Friend for being political, which is not a path that I wish to pursue. All I can say is that if we adopted a national minimum wage,


unemployment would rise by nearly a million and small business men would be the hardest hit if the Labour party were successful and a national minimum wage were introduced.

Land Mines

Mr. Llew Smith: To ask the President of the Board of Trade what proposals he has to ban the (a) manufacture and (b) export of land mines in (i) part and (ii) complete form. [23918]

The Minister for Trade (Mr. Anthony Nelson): We already have in place a wide-ranging national moratorium on the export of anti-personnel land mines. I have no plans to ban the manufacture of such land mines, although they have not been manufactured in this country or exported for a number of years.

Mr. Smith: Will the Minister follow the lead of General Schwarzkopf, 14 other high-ranking United States generals and the Australian Government in banning the use of anti-personnel land mines? Will the Government press for such a ban at the convention on inhumane weapons in Geneva next week?

Mr. Nelson: We keep those matters under constant review and we take careful notice of what our allies—particularly those in the North Atlantic Treaty Organisation—do in that regard. As the hon. Gentleman acknowledges, the proper place to discuss such matters is at the United Nations weaponry convention, which holds its concluding session towards the end of the month and I hope that it may lead to the implementation of a tighter regime. For the time being, however, the British Army and the British Government believe that land mines are necessary for our use and that casualties would be incurred if we did not have them. We do not export or manufacture them and we have imposed a moratorium and a ban on their export in a wide range of categories to a large number of countries.

Sir Donald Thompson: Will my hon. Friend take the matter very seriously, as hon. Members on both sides of the House are concerned about the proliferation of land mines which are disturbing even the aid going to Bosnia, including the recent very successful trip to that country organised by Welsh Rotary and supported by the international company Hasbro? Will my hon. Friend combine with officers in the Ministry of Defence and in the Foreign and Commonwealth Office to ensure that our voice is the loudest to speak out on the international scene against land mines?

Mr. Nelson: I of course take very seriously the points that my hon. Friend raises. We play an active role in international discussions about this issue and we abhor any loss of civilian life involved with the use of so-called dumb land mines. However, we must recognise that many land mines are used in internal conflicts in developing countries. When introducing any regimes or bans, it is important to ensure that the world acts in concert rather than unilaterally.
Many Opposition Members—67 of whom have signed an early-day motion on the subject—continually hark back to unilateralism. That would be absolutely pointless

in this and in other areas. International agreement is important and Her Majesty's Government are intent upon achieving it.

Engineering

Mr. Nicholas Winterton: To ask the President of the Board of Trade if he will make a statement on engineering (a) investment, (b) exports and (c) profitability. [23919]

Mr. Lang: Information on the profitability of the engineering industry is not collected centrally, but engineering industry exports were £75 billion in 1995—an increase of 18 per cent over 1994. As for investment, the business trends survey of the Engineering Employers Federation shows that it continues to be buoyant.

Mr. Winterton: Does my right hon. Friend, who was at school with me, accept the views expressed by the Manufacturing and Construction Industries Alliance—and shared by the Engineering Employers Federation—that quality of training is vital to the manufacturing industry and contributes directly to investment, exports and profitability? Does he agree that a skilled and a motivated work force is one of the United Kingdom's greatest assets? Will he and his Department help to drive forward the recommendations in Sir Ronald Dearing's review of qualifications for 16 to 19-year-olds in order to ensure that quality of training is a priority?

Mr. Lang: My hon. Friend and I were indeed at school together, although he looks far too young, and I agree absolutely that training is important. I warmly welcome Sir Ronald Dearing's proposals, which are not very different from those that I introduced in Scotland some years ago. I recognise the importance of improved training, and the improvements in the engineering industry are reflected by the fact that productivity in that industry rose by 21 per cent. between 1990 and 1995.

Mr. Sheldon: Is it not clear that the Government have shamefully neglected the importance of the manufacturing industry? Thankfully, that has now changed, but the Government still do not appreciate the importance of manufacturing investment. Capital allowances are only 25 per cent., which is less than depreciation in the first year. That is equivalent to a tax on investment in the first year. Should not the President of the Board of Trade be doing something about that?

Mr. Lang: The right hon. Gentleman seems to be a little out of touch with the manufacturing industry investment figures, which for plant and machinery rose by almost 10 per cent. last year and by some 15 per cent. in the past two years. He may be interested to know that unemployment in the manufacturing sector fell by 3,000 last month. Clearly, the success of the United Kingdom manufacturing industry is a reflection of the Government's successful management of the economy.

Mr. Dunn: Given the increase in manufacturing exports of some 90 per cent. since 1979, does my right hon. Friend agree that the introduction of the minimum wage and the social chapter would create an absolute nightmare for British success overseas?

Mr. Lang: My hon. Friend is absolutely right. Looking at the social chapter alone, non-wage labour costs in the


United Kingdom are some 18 per cent. while in Germany they are 32 per cent. and in Italy and France they are more than 40 per cent. It is because we have become more competitive and avoided such additional costs that United Kingdom manufacturing industry is now so successful.

Mr. Kaufman: Will the right hon. Gentleman condemn the decision by GEC to close its electrical engineering subsidiary, Long and Crawford at Gorton road, Manchester, with the destruction of 135 jobs, many of them held by men with a lifetime of skilled and dedicated service? The company is offering meagre redundancy payments and 100 workers who are being transferred to another site are having their pay reduced by £60 per week. Exports to the middle east, the Gulf and south America are being thrown away and the site is being asset stripped at a profit to GEC. Is that not a disgraceful way to approach manufacturing industry?

Mr. Lang: I regret the loss of any job in any factory in any constituency, but I simply do not recognise the picture that the right hon. Gentleman paints of GEC, which is one of our most efficient, competitive, aggressive and successful companies in export and domestic markets all over the world. GEC has made a substantial contribution to the rise in British manufacturing exports of 90 per cent. since 1979 because the Government have allowed it to manage its own affairs in the way it thinks best.

Mr. Fabricant: Is my right hon. Friend aware that, unlike the motley crew opposite, who are made up of ex-journalists, ex-trade union officials and ex-failed polytechnic lecturers, I worked in the engineering industry? Does he realise that the social chapter would not only produce the additional on-costs to which he has already referred, but that if we were to sign up to that terrible document, we would be signing a blank cheque with heaven knows what result for British industry, particularly engineering?

Mr. Lang: My hon. Friend is absolutely right. As British industry, particularly our engineering industry, has become so efficient, it has been able to achieve the figures that I have given the House. That is why the prospect of growth for next year also looks most promising.

Mr. Ingram: Will the President of the Board of Trade confirm the shocking figures that his ministerial colleague gave the House on 20 March when he said:
In the United Kingdom … only 12 per cent. of science and engineering graduates are in engineering. In Germany, the figure is 18 per cent.; in France it is 21 per cent. Germany produces a third more engineering and technology PhDs per head of population than we do and five times as many people are qualified to MSc standard."—[Official Report, 20 March 1996; Vol. 274, c. 326.]
Who is to blame for that shocking state of affairs? Is it our competitors, because they are so much better than us, or is it the Government, who systematically destroyed our manufacturing and engineering base during the 1980s?

Mr. Lang: There has been a substantial increase in the number of engineering graduates in recent years. Next year, the Government will be sponsoring the Year of Engineering Success, which I am sure will be as successful as the recent Science, Engineering and

Technology Week. The successful management of the economy and the encouragement of better skills has meant that engineering has contributed to British exports, which since 1981 have grown faster than those of Germany, France or Japan.

Mis-selling of Gas Contracts

Mr. Jamieson: To ask the President of the Board of Trade what discussions he has had with the Director General of Gas Supply about mis-selling of gas contracts in the south-west. [23920]

The Minister for Industry and Energy (Mr. Tim Eggar): My Department is keeping closely in touch with the Office of Gas Supply about the progress of gas competition in the south-west.

Mr. Jamieson: Is the Minister aware that trading standards officers in Devon have received record numbers of complaints about the selling by Swebgas of contracts to customers who were tricked into signing those contracts? Is he aware that Ofgas is totally helpless to protect customers? Is this yet another example of the Government looking after the market and putting the interests of consumers second?

Mr. Eggar: I have never heard anything more nonsensical, even from the Opposition. This Government introduced competition in the south-west and made it possible for consumers to be offered reductions of up to 25 per cent. in their gas bills.

Mr. Hicks: While in no way condoning unnecessarily aggressive salesmen, does not the introduction of other companies supplying gas in Devon and Cornwall afford the opportunity for gas price reductions in real terms, particularly in a region which hitherto has suffered as a consequence of regional differential pricing?

Mr. Eggar: I absolutely agree. Consumers in the south-west trial area can choose their gas supplier from 10 different competitors, a number of which are offering supplies without a standing charge or with substantial discounts to low-use as well as high-use consumers. That good news for consumers has been widely welcomed throughout the south-west.

Mr. Nigel Griffiths: Given the record number of complaints from customers in the south-west about mis-selling, how can consumers trust the same company to take over half the country's electricity generation?

Mr. Eggar: The hon. Gentleman always accentuates the negative. He is meant to represent the interests of consumers for his party, but we have not heard a single word of welcome from the hon. Gentleman for the substantial reductions in gas prices for individual consumers. The hon. Gentleman knows perfectly well that individual consumers in the south-west can get reductions in their gas bills of up to 25 per cent. Why does the hon. Gentleman not welcome that fact, even though he has always opposed competition up to now?

Mr. Harris: Will my right hon. Friend reject the predictable carping of Labour Members and accept the


genuine thanks of consumers across the south-west, who welcome increased competition which in some cases will mean £70 off the average gas bill? Is that not a good example of Conservative policies in action to the benefit of consumers?

Mr. Eggar: I completely agree. Those Conservative policies were introduced in the face of opposition by Labour Front-Benchers, whose arguments have been disproved by the results of competition so far in the south-west. I have no doubt that in the coming months large numbers of my hon. Friend's constituents will benefit considerably from reductions. He mentioned £70 off the average gas bill, but in my view that figure may be extended—and there are likely to be increased standards of service to individual consumers in addition to price reductions.

Renewable Energy

Mr. Tipping: To ask the President of the Board of Trade what plans he has to help promote renewable energy sources and industries in the United Kingdom. [23922]

Mr. Page: The Government are stimulating the development of new and renewable energy technologies and industrial and market infrastructure via the non-fossil fuel obligation and a supporting programme.

Mr. Tipping: Will the Minister consider further steps to help this country's environmental technology industries—including, for example, solar power, for which the global market was worth £1 billion in 1993. At that time, Britain had 10 per cent. of solar panel exports but was spending less than 1 p per person on solar research. Should not a research framework be established so that the UK can be the enterprise centre for creating new energy sources, making sure that British companies get a fair share of the world market?

Mr. Page: I am well aware of the hon. Gentleman's particular interest, and I broadly agree with the thrust of his question. He is right to remind the House that we sometimes take access to electricity for granted. We should never forget that millions of people have no electricity and that the only means of obtaining it will be through the use of photovoltaics. I can give the hon. Gentleman some good news. BP Solar alone achieved 7 per cent. of the world market in 1995 and has so far attracted orders in excess of £15 million. The market is huge, as the hon. Gentleman told the House, and I certainly want to see it developed.

Mr. Ian Bruce: My hon. Friend will know that the Government have been encouraging local authorities to burn municipal waste to create energy, but will he carefully consider the representations on the subject? Most constituents are in theory happy with that approach, but they do not want the effluent from incinerators anywhere near their homes. I wonder whether the Government have got local popular opinion wrong.

Mr. Page: The decision on where to locate any particular NFFO project is a planning matter for the local authority. The NFFO project is a two-pronged objective. One objective is environmental improvement, to reduce

the pollution that comes from conventional methods of energy production, and the other is the creation of a manufacturing base in renewables.

Mr. Battle: As the Minister said that he agrees with my hon. Friend the Member for Sherwood (Mr. Tipping) and that he is especially keen on photovoltaics, why does he not open up the fossil fuel levy, which at present excludes support for photovoltaics? Would it not be better to let them in to ensure that we end up a world leader in that industry and do not fall further behind?

Mr. Page: I remind the hon. Gentleman that the whole purpose of the non-fossil fuel obligation is to bring about a convergence of energy production from renewables so that that approach can actively and competitively compete in the market against conventional energy producers. The question of photovoltaics will be considered alongside all the others when we consider NFFO5 and, if it can achieve some market convergence, it could certainly be included. I would want to be convinced that the market convergence will be obtained, because I do not want to waste taxpayers' money.

Manufacturing (East Midlands)

Mr. Garnier: To ask the President of the Board of Trade when he next plans to visit Leicestershire for discussions with representatives of the manufacturing sector about Government policies to encourage exports and inward investment from and into the east midlands. [23923]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): Ministers in the Department keep in touch with all regions on a regular basis to stress the Government's commitment to competitiveness. The latest available figures show that the east midlands has the highest proportion of manufacturing gross domestic product of all the regions.

Mr. Garnier: Is my hon. Friend aware of just how successful the manufacturing sector of the east midlands and Leicestershire is in exporting not only to the European Union but to the wider world? Does he agree that one of the reasons for that is the highly useful role that the business links offices in Leicester and Market Harborough, which cover my constituency, have played? Does my hon. Friend also agree that the reason why we attract so much inward investment into those business regions is that we do not have a statutory minimum wage?

Mr. Oppenheim: I agree with my hon. and learned Friend, and it is not just the east midlands that has benefited. A recent survey showed that while the manufacturing productivity gap with Germany expanded to its widest margin by 1979, we in Britain have closed three quarters of that manufacturing productivity and competitiveness gap with Germany since 1979. That is quite an achievement and it shows that the period when Britain was in danger of becoming a second-rate, non-manufacturing, skivvy, low-wage economy was not under the Government but in the heroic days of Labour's industrial strategy.

Mr. Purchase: Is it not true that the majority of our productivity gains have been caused by loss of labour in


key manufacturing areas? Is it not also true that, in the face of Tory complacency, manufacturing as a fraction of GDP fell by more than a third in the years of Tory control? How does the Minister explain that away?

Mr. Oppenheim: First, the manufacturing sector in relation to GDP in Britain is at about the same level as in other European countries, such as France and Italy. Secondly—[Interruption.] If hon. Gentlemen would listen, they would hear that the number of manufacturing jobs has fallen in virtually every industrialised country. It has risen slightly in this country recently. What matters is not just the jobs in manufacturing but manufacturing productivity, which has risen because of organisational and efficiency improvements and manufacturing output. The key point is that whereas manufacturing output fell under the last Labour Government, it has risen sharply under this Government.

Rural Depopulation

Mr. Kirkwood: To ask the President of the Board of Trade what further incentives he proposes to assist industrial development in those rural areas in the United Kingdom experiencing depopulation; and if he will make a statement. [23924]

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): The Government provide a number of measures to encourage industry and commerce in rural areas. Some rural areas, such as the hon. Gentleman's constituency, also qualify for European structural funds objective 5b programmes and from Community initiatives programmes such as Leader II, for which further funding will be announced shortly.

Mr. Kirkwood: Will the Minister confirm that unemployment levels are still the determining factor for eligibility for regional selective assistance? Does he accept that some rural communities—such as Hawick in my constituency, which is not unique because there are similar communities throughout the United Kingdom—find that people leave the area to find work rather than sign on and register as unemployed? Will the Minister therefore give urgent consideration to making rural areas potentially eligible for regional selective assistance, where they can show long-term population decline as a result of job losses?

Mr. Taylor: The hon. Gentleman is right; unemployment has always been one of the dominant criteria. However, many factors are included in the RSA calculations. I pledge that I shall ensure that the hon. Gentleman's suggestion about depopulation is considered when the criteria are next reviewed.

Plant and Machinery

Mr. Pope: To ask the President of the Board of Trade what was the level of manufacturing investment in plant and machinery in (a) 1989 and (b) 1995. [23925]

The Minister for Science and Technology (Mr. Ian Taylor): Manufacturing investment in plant and machinery, measured in constant prices, was £12 billion

in 1989 and £10.3 billion in 1995. Investment in plant and machinery has grown by 16 per cent over the past two years as the economy has recovered from the recession.

Mr. Pope: Manufacturing accounts for only 20 per cent. of gross domestic product. Almost 3 million jobs in manufacturing have been lost since 1979. Manufacturing output is stagnant. This appalling state of affairs is the result either of incompetence or of malice on behalf of the Government; which is it?

Mr. Taylor: The manufacturing base has been immensely strengthened since 1979 when compared with the appalling performance under the Labour Government. Manufacturing output has reached a peak. It is recovering very quickly. I am delighted that 3,000 extra jobs were created last month alone in the manufacturing sector. Manufacturing output has risen 6.25 per cent. above its previous peak. That is all good news on the 20th anniversary of the Royal Academy of Engineering, which I shall be celebrating with it this evening.

Mr. Batiste: Is it not clear as we look around the world, including at Japan, America, Taiwan and Germany, that companies that are the best manufacturers regard Britain as the best place in Europe in which to manufacture? Is that not a consequence of the range of Government measures introduced since 1979, which have been opposed root and branch by the Labour party, year in and year out? Those measures are even now threatened by the Labour party's commitment to the social chapter, which would tie us irrevocably to the social costs that are making German manufacturing uncompetitive.

Mr. Taylor: I entirely agree with my hon. Friend. Over the past 10 years the United Kingdom has received £100 million-worth of inward investment, which has created employment throughout the country. We are the only Group of Seven country in which non-manufacturing costs form a lower proportion of total labour costs than in 1980. Our manufacturing record and the way in which we have responded to world competitive challenge are remarkable. The Labour party should remember to give some praise to British manufacturers' efforts.

Mrs. Beckett: Will the Minister take the opportunity to dissociate the Department of Trade and Industry once again from one of the more dangerous recent statements of the Deputy Prime Minister, when he suggested that levels of investment in manufacturing offered no cause for concern, especially as his justification was that business investment in the United Kingdom was a higher percentage of gross domestic product than in most other countries within the Group of Seven? The Library tells me that it is unable to substantiate the statement.
Does the Minister accept that, as the confidence of the Deputy Prime Minister seems to be misplaced, so too is the Government's rejection of measures such as investment allowances, which would encourage increased investment in manufacturing?

Mr. Taylor: I shall not get into a debate over librarians' statistics with the right hon. Lady. I want to get it across to the House that manufacturing industry is making an enormous effort to compete in the world. The CBI figures show that manufacturing investment could be


up by 9 per cent. this year. Even the Institute of Manufacturing's figure is up by 7 per cent. The right hon. Lady would be best served if she gave attention and encouragement to that process.

Future Large Aircraft

Mr. Wilkinson: To ask the President of the Board of Trade what request his Department has received for launch aid from aircraft, aero-engine or aerospace equipment manufacturing companies in the United Kingdom towards participation in the Airbus Industrie future large aircraft project. [23926]

Mr. Eggar: No such request has been received. Launch aid is granted under the Civil Aviation Act 1982 and is not available for military projects.

Mr. Wilkinson: I am reassured by that answer, as the market to which the FLA could be directed is already dominated at the one end by the C130J, in which British industry has a large stake, and at the other by the C17 McDonnell Douglas transporter. Would not launch aid be much better applied to Airbus Industrie's construction of a new jumbo jet, preferably in collaboration with McDonnell Douglas, which also wants to build such an aircraft, so that we can take on Boeing and fill the last remaining gap in Airbus Industrie's inventory of aircraft at the top end of the range?

Mr. Eggar: I take note of my hon. Friend's views. With regard to the future of Airbus Industrie, it is the Government's view that the highest priority is the rationalisation and increased competitiveness of Airbus Industrie, thus enabling it to compete effectively with Boeing and other aircraft manufacturers.

Mr. Cousins: Will the Minister make it clear that there will be no question of support for Airbus Industrie's jumbo jet project if it continues to have exclusive agreements with General Electric of the United States to build aircraft engines, to the disadvantage and exclusion of British aircraft engine manufacturers?

Mr. Eggar: Certain of the Airbus Industrie aircraft already use Rolls-Royce engines, but clearly it is important that if Airbus Industrie is to add to its existing range of aircraft, it should do so in a commercially sensible way, producing the highest quality aircraft at the lowest cost, thus giving a return both to shareholders and to Governments.

Internet Terminals

Mr. French: To ask the President of the Board of Trade how many Internet terminals there are in (a) the United Kingdom, (b) Germany and (c) France. [23927]

Mr. Ian Taylor: Figures are not available for terminals, but for hosts—in other words, computers directly connected to the Internet. In February 1996, the UK had more Internet hosts per head than either France or Germany, with 7.8 hosts per 1,000 inhabitants as against 5.6 for Germany and 2.4 for France.

Mr. French: I am grateful to my hon. Friend for confirming those figures, which show the UK to be in the

lead in this matter. Will he tell the House what progress he has made in reaching agreement throughout Europe on putting in place arrangements to screen out certain material from the Internet and in particular whether he has had an opportunity to make an appraisal of the proposals made by CompuServe?

Mr. Taylor: I am grateful to my hon. Friend for raising what is a difficult issue, but I must tell him and the House that Governments should tread warily in trying to control the information on the Internet, which is a network of networks that has had remarkable success largely because it has grown entirely through private initiative since its early days in the defence sector. If it is designed to survive a nuclear attack, it is likely to be resistant to Government regulation, as the German Bavarian Government found. That does not mean that there is not a large onus on the network service providers to provide a highway code for potential purchasers of software. I am encouraging them to do that, and I hope that we shall see progress over the next few weeks.

Mr. MacShane: If the Minister is so keen on the spread of information, why has his Department undertaken legal action of the most outrageous nature against Mr. Adam Raphael of The Economist to gag—

Madam Speaker: Order. "Erskine May" clearly says that a supplementary question must follow the substantive question closely. We shall move on.

Oil and Gas Reserves

Mr. Canavan: To ask the President of the Board of Trade what is the latest estimate of the oil and gas reserves in the United Kingdom continental shelf. [23928]

Mr. Eggar: The reserves estimates for 1995 are still in preparation and will be published in volume 2 of the "Energy Report" later this month.
At the end of 1994, however, remaining discovered reserves were estimated to lie between 575 million and 2,075 million tonnes of oil and 660 billion and 1,915 billion cu m of gas.

Mr. Canavan: As our trade deficit would be even worse if it were not for oil and gas reserves, which have brought revenues to the Treasury amounting to a total of £137 billion in today's prices, is it not one of the greatest national scandals of our time that the Tories have frittered away most of that money instead of investing it in the nation's future?

Mr. Eggar: The considerable revenues that have flowed from North sea oil and gas have been invested in infrastructure, the health service and education—and, I might add, in repaying a fair proportion of the debts left to the country by the last Labour Government. But the most important aspect of the North sea oil and gas industry is the employment that flows from it, both directly and indirectly. It is estimated that well over 300,000 jobs depend on the industry, and many of our most technologically advanced manufacturing companies produce goods related to it.

Mr. Jenkin: How much oil and gas would have been discovered over the past 15 years if oil and gas in the


North sea had remained in public ownership, and the companies concerned had remained under state control—starved of the private finance that is necessary for investment? How much revenue would we have earned, and how many losses would the Government have had to finance?

Mr. Eggar: I speak from memory, but I believe that in the late 1970s there were confident predictions from the right hon. Member for Chesterfield (Mr. Benn) that the United Kingdom would be coming to the end of its oil production during the latter part of the millennium.

Energy Pre-payment Meters

Mr. Martlew: To ask the President of the Board of Trade what plans he has to ensure that customers on prepayment meters are not discriminated against in the competitive energy supply markets after 1998.[23930]

Mr. John M. Taylor: Competition is the best way of reducing prices and improving services for all customers. In the competitive gas and electricity markets, all customers of the current public suppliers—including those on pre-payment meters—will be free to choose their supplier.

Mr. Martlew: Is it not a fact that those with pre-payment meters now pay considerably more than those who pay by direct debit? With the freeing up of the market, what action will the Government take to protect the poor and most vulnerable from exploitation? Will they give those people hope, and say that they should be paying the least for energy? At present, those people are paying the most.

Mr. Taylor: As the hon. Gentleman says, there is evidence that, historically, additional costs have been involved in supplying pre-payment customers. However, the regulators are charged with ensuring the existence of safeguards against discrimination in the marketplace. New gas suppliers are offering savings to customers, whatever their level of consumption—an average of 15 per cent. to 20 per cent. off—and I understand that new suppliers also plan to offer savings to pre-payment customers.

Aircraft Exports (India)

Mr. Madden: To ask the President of the Board of Trade what representations he has received concerning the supply by British Aerospace to India of Hawk 100 aircraft. [23931]

Mr. Nelson: None.

Mr. Madden: India and Pakistan have gone to war over Kashmir in the past, and both countries now have a nuclear capability. Does the Minister agree that another war over Kashmir is potentially the most dangerous conflict in the world today? Given that serious situation, does he also agree that it is grossly irresponsible for Her Majesty's Government to promote sales of Hawk aircraft or other arms to either India or Pakistan? Instead of promoting arms sales, should they not press the Governments of India and Pakistan to come to the negotiating table, under the auspices of the United

Nations—in line with UN resolutions—to reach a political settlement of the Kashmir dispute that would give the people of Kashmir the right to determine their own destiny?

Mr. Nelson: I share the hon. Gentleman's concern—a concern that must be felt by hon. Members on both sides of the House—about the continued unsettled, simmering situation in Kashmir. However—although it is not directly my ministerial responsibility—I must tell the hon. Gentleman that I do not necessarily accept that we should not be engaged in the sale of defence equipment to India.
I have not considered an application for a licence for the export of Hawk aircraft. We know that India requires an advanced jet, and—along with the Prime Minister and others—I have taken opportunities to commend Hawk to India. We await events, but we must follow our own licensing application procedures. We must also be careful not to do what the Labour party seems increasingly to be doing—turning down virtually every export market that we have for defence equipment.

Mr. Atkins: Does my hon. Friend agree that the Hawk 100 is one of the most successful aircraft of its type, built as it is partly in my constituency, and that, in export terms, British Aerospace is one of the most successful companies worldwide? Does he therefore agree that any attacks on the credibility of customers who want to buy such aircraft from such companies, as has been occurring recently in certain aspects of the British media in relation to Saudi Arabia, does nothing but damage prospects not only for the aircraft and the company but for the jobs of many people, including those in my constituency who are contributing substantially to the economy's future?

Mr. Nelson: I concur whole-heartedly with what my right hon. Friend says about British Aerospace and our specific export market in Saudi Arabia. British Aerospace is this country's top exporter and is responsible for employing 25,000 people. Yet, at every opportunity, the Opposition seem to be turning down export markets. Some of the reports, malicious and mischievous as they have been, about one of our principal markets for defence sales, the market in Saudi Arabia, have potentially been most injurious. The Government certainly do not share those views. It is a most important market to which we want to continue to supply defence and other equipment.

Manufacturing Industry

Mr. Win Griffiths: To ask the President of the Board of Trade when he next plans to meet his European Union counterparts to discuss manufacturing industry. [23933]

Mr. Lang: My colleagues and I meet our European Union counterparts regularly to discuss a range of industrial issues.

Mr. Griffiths: Will the Secretary of State confirm that, out of the 15 members of the European Union, Britain ranks 11th in manufacturing output and that, since his party has been in power, more than 40 per cent. of manufacturing jobs have been lost? What lessons does he think he can learn from all those countries whose manufacturing output is higher than that of the UK?

Mr. Lang: I do not know where the hon. Gentleman got his figures from, but he might like to know that the


British economy grew faster than the Group of Seven average in 1993–94, and is expected to be ahead of the pack, along with Germany, in 1996. If he looks at investment, he will see that under this Government it has risen six times faster than it did under Labour. Indeed, alone among our main EU competitors, British companies' investment in research and development rose again last year for the fifth successive year. I simply do not recognise the picture that the hon. Gentleman is trying to paint.

Mr. Hoon: Why do the Government claim to have made Britain the enterprise centre of Europe when, according to Organisation for Economic Co-operation and Development figures, only four out of the 15 EU countries have lower levels of manufacturing output, Britain is in 11th place in the EU in investment per head of population, and in trade with other European countries Britain has the worst trade deficit of every country except Greece?

Mr. Lang: I have already given the House the investment figures. On the competitiveness of the British economy, the hon. Gentleman will be aware—if he is not, he ought to be—that the British productivity growth rate was bottom of the league under the Labour party and is now at the top.

Intermediate Development Areas

Mr. Barry Jones: To ask the President of the Board of Trade what percentage of Great Britain is now designated an intermediate development area. [23934]

Mr. Oppenheim: Development areas cover 16 per cent of the working population of Great Britain and intermediate areas cover a further 17.75 per cent.

Mr. Jones: Why did the Government strip my constituency so unnecessarily of full development area status? Will the Government please restore it, bearing in mind our employment problems and the fact that we are encountering problems with inward investment as a result of the lack of development status? Does the hon. Gentleman know that it was noted in my constituency that full development area status was given to a neighbouring English constituency that is represented by the former Secretary of State for Wales, the right hon. Member for Wirral, West (Mr. Hunt)?

Mr. Oppenheim: The hon. Gentleman's constituency has benefited, and still does, from a certain amount of regional aid. Since 1983, that has helped to safeguard 10,000 jobs and attracted a number of new companies to his constituency. In November 1995, we announced that the map would not be revised again this Session. It is only just under three years since it was last revised. I am sure that the hon. Gentleman would accept that we need some stability, especially to allow investors to make their long-term decisions. The other point that he should remember is that the EU limits the total area to which we are able to give coverage, and if we were to give further coverage to his constituency, it would mean a reduction in another area.

Mr. Michael Brown: I take issue with the hon. Member for Alyn and Deeside (Mr. Jones) for this reason. Like him,

I had a development area in my constituency; but we lost it when the map was last revised—thank goodness. The fact that we lost development area and assisted area status is a tribute to the growth in the economy in my constituency. Will my hon. Friend take it from me that industry now comes to my constituency not because it has the begging bowl of development area status but because unemployment has come down? Will he tell the hon. Gentleman that the real benefit that comes when a constituency no longer has development area status is that it has a growing economy and is therefore successful?

Mr. Oppenheim: My hon. Friend is absolutely right. His constituency lost jobs in the early 1980s, and it was a difficult time. The steel industry, for example, employed a lot of people in his constituency. That industry lost billions of pounds a year under Labour. It was the world's largest loss maker, and we had a £1 billion a year deficit in iron and steel products. Now British Steel—in a country where the manufacturing base has supposedly been devastated—is the most profitable steel company in Europe, and we have a £1 billion export surplus in iron and steel products. That shows the difference between our policies and the dead hand of old Labour's industrial policies in the 1970s.

Manufacturing Industry

Mr. Sheerman: To ask the President of the Board of Trade what steps he is taking to improve the quality of senior managers in British manufacturing industry. [23937]

Mr. Eggar: The Government have been working with a wide range of organisations to promote and improve senior management skills which are an essential component of improving competitiveness.

Mr. Sheerman: The Minister will know that, apart from the low quality of Ministers in the Department of Trade and Industry, the most difficult barrier that our manufacturing industry faces is a scarcity of high-quality managers. Will he speak to Professor Kumar Bhattacharyya and look at the Warwick experience in terms of training high-quality manufacturing managers? We need a scheme that clones or replicates that development of qualified and specialised postgraduate managers. If we did that, we could start to repair some of the damage that the Government have done to our manufacturing sector.

Mr. Eggar: The hon. Gentleman rightly pays tribute to the work of the university of Warwick, and I join him in that. He fails, however, to recognise the considerable increase in the number of graduate business schools which are developing manufacturing expertise among senior management. He fails also to pay tribute to the work done at those business schools. Any fair-minded analysis of the present state of British manufacturing industry would recognise that there has been a considerable change in the quality of management at all levels. I also pay tribute to most of the work force in British manufacturing industry, whose skills have improved dramatically since the late 1970s.

Exports

Mr. Harry Greenway: To ask the President of the Board of Trade if he will make a statement on the current level of exports in (a) manufacturing, (b) financial services and (c) other areas. [23938]

Mr. Nelson: In 1995, manufacturing exports were £127 billion, exports of services were £43 billion—of which £5.5 billion were net financial services—and earnings from overseas assets were £90 billion.

Mr. Greenway: Does my hon. Friend agree that success breeds success? Would it not be right to show those excellent figures all around the world? Will that not lead to more jobs being created in this country? Would that not be better than the negative attitude of Labour and the other parties, who constantly talk down the great success that our exports are having?

Mr. Nelson: The answer is certainly yes, and I am grateful to my hon. Friend for drawing attention to the record export of goods and services and receipts from foreign investment. Those should be a matter for joy and celebration on both sides of the House, but they clearly are not. We should advertise our successes more—for example, we are now exporting more per head than Germany or Japan. That is happening not just because of business but because of the policies of the Conservative Government.

Mr. Dalyell: Will the Minister put in the Library any information his Department has about exports to the Rabta project in Libya, alleged by some to be a chemical weapons site and by others to be major water-producing site? What is the British Government's reaction Government to the alleged refusal to send an international inspection team at the invitation of the Libyans to see what they are up to?

Mr. Nelson: I do not recognise the allegations that the hon. Gentleman makes, but I would be very happy to look

into the matter and to write to him. If he then wants to table a question, I will endeavour to answer it as fully as possible.

Equitas Rescue Plan

Mr. Timms: To ask the President of the Board of Trade when he expects to make an announcement on the Equitas rescue plan initiated by Lloyds. [23940]

Mr. Nelson: As I announced on 29 March in answer to a question from my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), I authorised Equitas on that day.

Mr. Timms: I think the Minister will confirm that this will be the biggest single reinsurance transaction in history. Given that his approval was only conditional when he made his announcement on 29 March, can he tell us when he expects to be in a position to consider giving full authorisation to the project and what he will require before he does that?

Mr. Nelson: As the hon. Gentleman will know, there were a number of conditions precedent to the full authorisation of Equitas. It will require principally a vote of the names to support the reconstruction recovery programme and the paying in of sufficient funds to capitalise Equitas not only to meet its long-term liabilities under the policies but to provide the sufficient margin of solvency that I am required to be satisfied about under the Insurance Companies Act 1982. I have set out those requirements and criteria carefully and I hope that the matters can be decided on by the autumn. That is a matter not for me but for Lloyds and Equitas in particular. When they come back to me, I will have to consider whether the conditions have been met and whether full authorisation can be granted.

Points of Order

Mr. Bill Michie: On a point of order on the rights of Back Benchers, Madam Speaker. At column 509 of the Official Report of Prime Minister's Question Time yesterday, in answer to my Question 2, the Prime Minister claimed that Sheffield city council had an uncollected debt of £558 million. In fact, the £558 million is the Government-approved borrowing requirement for housing, schools and other important things. He also said that Sheffield was a "rubbish" city council, because of its bad collection record, yet the Department of the Environment admits that Sheffield is second from the top of the big six, and has a collection rate of more than 90 per cent.

Madam Speaker: Order. What is the point of order for me?

Mr. Michie: Is it in order for me to continue and raise the issue—

Mr. David Shaw: rose—

Madam Speaker: Order. Just a moment. Let me deal with one point at a time. The hon. Gentleman is over-anxious, as always.
If the hon. Member for Sheffield, Heeley (Mr. Michie) seeks to make a point of order, it must be a matter of procedure for me to deal with.

Mr. Michie: It is.

Madam Speaker: Then tell me how I can deal with it.

Mr. Michie: It is a matter of misleading the House. The problem is that everything that the Prime Minister said was totally untrue. He should be asked to withdraw those remarks, and apologise to the House and the people of Sheffield.

Madam Speaker: As the hon. Gentleman and the House knows, I have no responsibility whatever for the content of answers given by Ministers at the Dispatch Box, but the hon. Gentleman has made a point and he must pursue it by other methods. He can do that by means of the Order Paper and in many other ways of which I am sure he is well aware.

Mr. David Shaw: On a point of order, Madam Speaker. It has been a tradition of the House that, if a major inward investment proposal comes to this country, the Deputy Prime Minister or the President of the Board of Trade inform the House that that is the case. Can you account for the fact that no Government statement appears to be in position, yet there is an article in today's Times that suggests that hundreds of millions of pounds of inward investment are coming to the Hartlepool area?
It appears that a Member of Parliament on the Opposition Benches has been to the far east to get hundreds of millions of pounds for his area. Why is none

of this money coming to other constituencies? We would all like some of that money. Could we not have a Government statement on the position?

Madam Speaker: I have not been informed that any Minister seeks to make a Government statement today. I do not always believe what I read in the newspapers. Newspaper people are often inclined not to spoil a good story with the facts.

Mr. Denis MacShane: I raise a point of order concerning the rights of a Back Bencher. Madam Speaker, you gently rebuked me during question time when I sought to raise a question about Mr. Raphael of The Economist. How can I, under our procedure, ask the President of the Board of Trade to defend this most monstrous assault on press freedom, and, in particular, to get an assurance from him that no gagging order or further attempts against The Economist will be pursued?

Madam Speaker: Order. The hon. Gentleman tried to put his question in a supplementary question on question 12 which dealt with Internet terminals. He should try to put his question in the correct order, in the usual way—through the Table Office—to the appropriate Minister.

Mr. Paul Flynn: I raise a genuine point of order concerning the procedures of the House and the ability of Back Benchers to correct misleading impressions that are given in oral questions. Madam Speaker, on three occasions recently I have given you notice when information that has been given in answers by Ministers from the Dispatch Box has been untrue or at least highly misleading.
You will recall that, yesterday, I asked a question on a serious matter involving 200 deaths from the drug paracetamol. The Minister said that there were 45 to 60 deaths. I checked with the Library, and it confirmed that my figure is correct—that there have been 220 net deaths from paracetamol alone, and that there have been 585 deaths in which paracetamol was involved. This is a matter of enormous importance. My figure is far removed from the Government's figure.
The matter that I wish to raise—I have asked the Procedure Committee to look at it—is whether we could have a period during our day in which we can raise these matters, not under bogus points of order—as occurs in other Parliaments throughout the world. We would have the opportunity to raise issues and to correct untrue impressions that have been given from the Front Bench—inadvertently or otherwise.

Madam Speaker: I have been present in other Parliaments where they have the use of zero hours, which I assume the hon. Gentleman is seeking. I would not recommend it.

Mr. Tam Dalyell: On a point of order, Madam Speaker.

Madam Speaker: Order. I have not finished my response—I have been asked a number of questions.
The hon. Gentleman has followed the correct procedure, since he has referred the matter to the Procedure Committee. He also wrote to me following the


answer to his question yesterday. He followed the right procedure by writing to the Minister concerned setting out the detail, giving what he believes to be the correct figures, and asking for a correction. Perhaps he should now wait for the Minister to give a response to that letter as he wrote it only yesterday.
I refer the hon. Gentleman to the Order Paper, where he can table further parliamentary questions on the matter. He can also use the Order Paper to put down an early-day motion if he feels that he has been unfairly and incorrectly treated.

Mr. Dalyell: My hon. Friend the Member for Sheffield, Heeley (Mr. Michie) ought to pursue his point in a different way. It is a matter for you, Madam Speaker, and for the Procedure Committee. It is a matter of procedure rather than substance in this case.
There is an entirely new practice in this House, whereby senior Ministers, particularly the Prime Minister, rubbish local authorities without having had the courtesy to check with those local authorities on the facts. I cannot talk about the particular case of Sheffield, as you would rule me out of order. However, there is the general issue of the elected Parliament treating elected authorities with maximum discourtesy. I think that is a matter for the Speaker of the House of Commons.

Madam Speaker: As I said in reply to the original point of order, the Speaker of the House—as the hon. Gentleman knows, and as all hon. Members know—has no authority whatsoever in relation to the content of answers and speeches that are made in the House, including those made by Ministers. If, through the usual channels, the hon. Gentleman seeks—and the House wishes to have—a debate on this matter, it might be a good way of opening up the issue about which he is concerned.

Mr. Richard Caborn: rose—

Madam Speaker: Another one from Sheffield.

Mr. Caborn: On a point of order, Madam Speaker. The issue that my hon. Friend the Member for Sheffield, Heeley (Mr. Michie) raised is important for the integrity of the House. Examples of the House being misled have been given this afternoon. Will you guide the House by saying that you disagree with such deliberate misleading, and that facts should be checked, because the House is being brought into disrepute?

Madam Speaker: I have made it quite clear that the Speaker has no responsibility for the content of answers

given by Ministers. The Order Paper is there to be used. If hon. Members wish to make it plain in an early-day motion that they feel that incorrect information has been given, it is there for them to use it to gain publicity and to press for debates on those matters. That is the only way to pursue such points, unless hon. Members want to refer the matter to the Procedure Committee.

Sir Michael Neubert: Further to that point of order, Madam Speaker. Will you deprecate the suggestion that the House was deliberately misled, because that is out of order?

Madam Speaker: I certainly deprecate that, and it is not the case. Ministers, as well as hon. Members, are responsible themselves for the comments that they make here. It is certainly untrue that the House was deliberately misled yesterday. I would have deprecated it at the time had I thought that that was the case.

Mr. Dennis Skinner: On a point of order, Madam Speaker. Have not the exchanges involving my hon. Friends from Sheffield shown once again that the Government would not recognise the truth if it was sprayed on their eyeballs?

Madam Speaker: I do not recognise a point of order there, so we may proceed.

BILLS PRESENTED

NORTHERN IRELAND (ENTRY TO NEGOTIATIONS, ETC)

Secretary Sir Patrick Mayhew, supported by the Prime Minister, Mr. Secretary Heseltine, Mr. Secretary Howard and Mr. Michael Ancram, presented a Bill to make provision for elections in Northern Ireland for the purpose of providing delegates from among whom participants in negotiations may be drawn; for a forum constituted by those delegates; for referendums in Northern Ireland; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 105.]

COMMONWEALTH DEVELOPMENT CORPORATION

Mr. Secretary Rifkind, supported by Mr. Jeremy Hanley, Mr. Michael Jack and Mr. Anthony Nelson, presented a Bill to amend section 2 of the Commonwealth Development Corporation Act 1978 to confer further powers on the Commonwealth Development Corporation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 106.]

Disabled Persons (Services, Consultation and Representation) Implementation

Mr. Gordon McMaster: I beg to move,
That leave be given to bring in a Bill to provide for the coming into force of the provisions of the Disabled Persons (Services, Consultation and Representation) Act 1986 relating to the appointment and rights of authorised representatives, the assessment by local authorities of the needs of disabled persons, and the procedures to be implemented when a person is discharged from hospital, and to make corresponding provision in respect of the Disabled Persons (Northern Ireland) Act 1989.
It is almost exactly 10 years since the private Member's Bill promoted by my hon. Friend the Member for Monklands, West (Mr. Clarke) received an unopposed Third Reading. A few weeks later, the Disabled Persons (Services, Consultation and Representation) Act 1986 was given the Royal Assent and passed into law. Yet a decade later, four major sections of that Act of Parliament have still not been implemented. Those provisions would have made a tangible difference to the lives of countless thousands of disabled people and people with mental illnesses.
The Government's continued refusal to implement the law of the land is an insult to those people and their carers. But it is more than that—it is an insult to the House, and to democracy itself. Surely it cannot be right for a Government stubbornly to ignore a law passed by Parliament. A Bill that is enacted and then not acted on cannot change anything for anyone. An Act that is not put into action is reduced to empty words and broken promises. Disabled people are disappointed—and, yes, angry—that that Act is still not being fully implemented; but they are not surprised.
It is not the first time that legislation designed to improve the lives of disabled people has been passed by Parliament and ignored by Government. For example, the Chronically Sick and Disabled Persons Act 1970, which was piloted through the House by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), has suffered the same fate. Many hon. Members, and countless thousands of disabled people throughout the country, deeply regret my right hon. Friend's decision not to seek re-election. The best tribute that we could pay him for his years of dedicated service to the cause of disabled people's rights would be to implement both his Act and the 1986 Act, in full and now.
Earlier today, along with hon. Members from both sides of the House, I attended the launch of a new campaign called Time to Care. Hundreds of people from all parts of the country came here to demand an urgent overhaul of care in the community. This Bill would be a significant step forward in that campaign, because it would give disabled people, people with mental illnesses and those with learning difficulties the right to have an advocate, the right to be consulted on their care, the right to be represented, and the right to have a proper assessment of their needs. A 30-minute meeting involving advocacy, could rescue someone from a lifetime of misery.
When my hon. Friend the Member for, Monklands, West drew first place in the private Members' ballot more than 10 years ago, he introduced a Bill that had the support of all parties in the House. The Health Minister

at the time described the Government's position as "sceptical neutrality". Following an intervention by the then Leader of the Opposition, Neil Kinnock, the day before the Bill was to be read the Third time, the Prime Minister—Mrs. Thatcher, as she was then—agreed to let it pass, subject to some redrafting.
My hon. Friend the Member for Monklands, West then found a queue of Ministers at his door—Ministers who had refused to discuss the Bill with him during the preceding months. He worked with them through the night to redraft and amend the Bill, and the next day it had an unopposed Third Reading. That is what makes the Government's failure to implement the Tom Clarke Act all the more absurd. They are refusing to implement important sections of an Act that they had a hand in drafting.
Yesterday, the Prime Minister boasted in this Chamber about the Government's record on improving the lot of disabled people. I would challenge that claim, and so would millions of disabled people. How can they be full and equal citizens if they do not enjoy the fundamental and basic right to be consulted about the services delivered to them? How can their potential be maximised if they do not have the right to be represented, when, for whatever reason, they cannot represent themselves? How can services be targeted and tailored to suit their needs, if those needs are not assessed?
The Government place great emphasis on the citizens charter. We are told that it is all about empowering individuals. That is precisely what the 1986 Act is about—empowering disabled people, people with learning disabilities and those with mental health problems to have a say in their own lives, and, where they cannot have that say, to have an advocate speak for them.
It is not only plain wrong to impose care packages on people without giving them a say in what those packages should contain: it can also be wasteful. It can be costly to provide inappropriate community care—costly to the provider, the individual and the community. We all know of cases in our constituencies of people who have been discharged from long-stay institutions and have caused problems in the community. That is bound to happen when there is no proper assessment of need.
In a recent case in my constituency, someone was discharged and given a house in a community with which he had no connection and where he felt lonely and isolated and had no one to offer support. Almost inevitably, he drifted into a life style that caused problems for his neighbours, who came to my surgery to ask for my help. Coincidentally, the person they were complaining about came to see me later the same day. It took no more than a few minutes to establish that he had family support available in another area. Had his needs been properly assessed, and had he been consulted, the situation could have been avoided.
We all know of the two separate tragedies that occurred in lion's dens because of the lack of proper assessment before discharge. But each and every day, people are discharged from long-stay institutions and find themselves in a metaphorical lion's den because their needs have not been assessed. There are increasing numbers of mentally ill people in prisons across the length and breadth of the country because the courts have nowhere else to send them. Advocacy, consultation, and, above all, the assessment of needs before discharge, would do much to avoid that situation.


If we take a walk along the streets of any major city any night of the week, we see people that community care has failed. It has given them only cardboard homes and cardboard hopes. The nation is shocked at newspaper headlines about another murder or tragedy involving someone who has been discharged from a long-stay institution.
The natural reaction is to blame community care. That is wrong. It is not the concept of community care that is wrong, but the lack of support and assessment. It is a great disservice to the United Kingdom's 6.5 million disabled people, the hundreds of thousands with learning disabilities and the 7 million carers that they face this plight. It is also an appalling waste of the talents and abilities of hundreds of thousands of ordinary people, including young people, who would be willing to be voluntary advocates. They have been denied that opportunity of personal fulfillment.
All I am asking is that the examples of best practice that already exist in some places in the UK should become the norm for the entire nation. As my hon. Friend the Member for Monklands, West said when he introduced his Bill in 1986, for too long disabled people have been "done unto". He was right. Disabled people craved independence then, and they still crave it now.
If the Tom Clarke Act was right and necessary in 1986, it is right and even more necessary in 1996. I call on the House to remove a blemish from its reputation, and to deliver this aspect of civil rights to our disabled people. In that spirit, I commend my Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Gordon McMaster, Mr. Alfred Morris, Sir John Hannam, Mr. Gareth Wardell, Mr. Dafydd Wigley, Mr. Charles Kennedy, Mr. Dennis Canavan, Rev. Martin Smyth, Mr. John Hume, Mrs. Margaret Ewing, Mr. Peter Thurnham and Mr. Tom Clarke.

DISABLED PERSONS (SERVICES, CONSULTATION AND REPRESENTATION) IMPLEMENTATION

Mr. Gordon McMaster accordingly presented a Bill to provide for the coming into force of the provisions of the Disabled Persons (Services, Consultation and Representation) Act 1986 relating to the appointment and rights of authorised representatives, the assessment by local authorities of the needs of disabled persons, and the procedures to be implemented when a person is discharged from hospital, and to make corresponding provision in respect of the Disabled Persons (Northern Ireland) Act 1989: And the same was read the First time; and ordered to be read a Second time upon Friday 26 April and to be printed. [Bill 107.]

Opposition Day

10TH ALLOTTED DAY

Railtrack

Madam Speaker: I have selected the amendment in the name of the Prime Minister.

Ms Clare Short: I beg to move,
That this House, noting both the public opposition to the privatisation of the railways throughout the United Kingdom and the undertaking given by Her Majesty's Government during the passage of the Railways Act 1993 that Railtrack would remain a publicly owned company for the foreseeable future and believing that the flotation of Railtrack will damage the national interest, lead to short term profits being put before long term investment and to lower safety standards, calls upon Her Majesty's Government to withdraw the present plans for the sale of Railtrack and to conduct a thorough review with the aim of securing for the nation higher levels of rail investment, improved services and the best possible return on taxpayers' money.
The motion points out that the overwhelming majority of the population of the United Kingdom—which of course includes Northern Ireland—are opposed to the privatisation of the railways. It also draws attention to the fact that the House of Commons has never given its consent to the sale of Railtrack, which owns the track, signalling, bridges and stations that lie at the heart of the railway network.
It is notable that, during the passage of the Railways Act 1993, the House was repeatedly assured that Railtrack would remain a publicly owned company for the foreseeable future. Many quotes are available to prove that point, but I will give the House only two today. The then Secretary of State, the right hon. Member for South Norfolk (Mr. MacGregor), speaking on Second Reading, said:
Outright privatisation of all the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that."—[Official Report, 2 February 1993; Vol. 218, c. 160.]
The then Minister of State, the right hon. Member for Kettering (Mr. Freeman), speaking in Committee, said:
Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]
That assurance was repeated time and time again during the passage of the Railways Act 1993.
I am sure that all hon. Members will agree that rail privatisation with the core of the system remaining publicly owned is very different from privatisation with Railtrack as a private company. It is fair to say, therefore, that Parliament was misled about the Government's intention when the Railways Act 1993 was passed.
It is because we believe that the privatisation of Railtrack is deeply damaging to the national interest that we have arranged today's debate. We are aware from the Save Our Railways poll taken some months ago that, when Tory Members of Parliament were asked anonymously whether they supported rail privatisation, 20 per cent. of them said that they were opposed to it. The challenge to them today is to vote for what they know to


be right, and to vote for the national interest. It will be very interesting indeed to see the strength of their consciences.
Northern Ireland is also threatened with rail privatisation, although it is on a slower track than that of the rest of the United Kingdom. Rail privatisation will obviously damage the transport system in Northern Ireland, and it will be very interesting to see how hon. Members representing constituencies in Northern Ireland vote today.
Before going any further, I should like to say a word about tax. The cost of privatising the railways amounts to an extra £106.38 for every taxpayer in the country. That is equal to an extra 1p on the basic rate of income tax. Those who are concerned to reduce taxes should therefore vote with us to halt the sale and save the taxpayer a lot of money.

Mr. Den Dover: rose—

Ms Short: I shall not give way on that point.
The costs of privatisation to the taxpayer are shockingly large. It cost the taxpayer £1 billion to prepare British Rail for privatisation. That was one-off spending, but surely the money would have been better spent improving the west coast main line, which is my line and which is falling into ever greater disrepair and becoming more unsafe and unreliable. On top of that, it is costing the taxpayer an extra £850 million every year to run the privatised structure, which is less efficient and more costly than the old British Rail. In other words, the taxpayer is paying more for a lesser service.
Under the privatised structure, the taxpayer is expected to pour £2 billion every year into the top of the system. That trickles down, providing profits for all 100 companies that British Rail has now become, but there is no accountability to the public for the expenditure of that money and no return on taxpayers' investment. As the right hon. Member for South Norfolk said when he uttered the words that I cited earlier, that is a ridiculous set of arrangements.
If we consider specifically the cost of the sale of Railtrack, we come across other major problems. There has been a big fattening up and a creation of sweeteners to get the company sold at any price, no matter the cost to the taxpayer or the damage to our railways. Thus, a company whose modern equivalent value is £6.5 billion is to be sold for an estimated £1.5 billion, which is disgraceful in itself.
In order to get the company sold, £1.46 billion of debt—money owed to the taxpayer—has been written off. An unprecedented £69 million of profits earned while Railtrack was owned by the public is to be given to shareholders who have not yet even bought a share. Nevertheless, that money is being prepared for them. Big bonuses are on offer to the top six executives if they manage to maximise short-term profits. That is the opposite of what rail needs—rail requires long-term thinking and long-term investment.
I am afraid that the damage of Railtrack privatisation goes even further. To get the company sold, track access charges have been set very high. Thus, it costs £170,000 a year in track access charges alone to put one passenger coach on the railways. That compares with £300 to £450 in vehicle excise duty for a coach on the roads. To get

Railtrack sold, the costs of using rail have been set so high that there will be no expansion of rail use under the privatised structure. Given the current projections of congestion on our roads, we must get more passengers and freight on to the railways to keep the country moving and breathing in the future. Under the arrangements in place, that cannot be done.
Although the Government babble about increased investment under privatisation, the reality is that the prospectus makes it clear that there is no expectation of growth in the use of rail under the proposals. Page 29 of the prospectus states:
Railtrack's passenger access income is unlikely to benefit materially from any increase in passenger use".
Page 30 of the pathfinder prospectus states:
The opportunities for expanding rail freight operations are limited.
There we have it; they are the real intentions.

Mr. Dover: I am sure that every hon. Member will join the hon. Lady in wanting more passenger and freight movement on the railways, but, after 20 or 30 years of falling passenger and freight rail movements under the nationalised system, what formula has she for increasing them?

Ms Short: We will increase the amount of freight and the number of passengers on the rail network by ensuring that there are higher levels of investment and better quality, more reliable and faster services—the opposite of what is occurring under the privatisation process.

The Secretary of State for Transport (Sir George Young): I am interested to hear the hon. Lady's commitment to higher levels of investment: where will it come from?

Ms Short: We have made it clear to the Secretary of State and to others for a long time that we are interested in mobilising public-private partnerships. My right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made that recommendation as shadow transport spokesman in order to secure more investment in the rail network. That is occurring in other countries, and it should happen here also.
In addition to the terribly high track access charges that will prevent expansion in rail use, another major worry with the sale of Railtrack is that it controls much valuable land: stations are situated on valuable commercial land at the centre of every town and city in this country. There is a real danger that a Railtrack interested in maximising short-term profits will seek to misuse land that is needed for rail development in order to make a quick profit. That would constitute a major breach of the national interest.
I turn now to the reports in today's press about the serious leak yesterday of the letter from the chairman and chief executive of British Rail, Mr. Welsby—a Tory appointee. He wrote to the permanent secretary of the Department of Transport complaining that the prospectus is significantly misleading. That is a very serious allegation. The issue involves the penalties that Railtrack is required to pay if it fails to keep its agreements with other railway operators.


Page 41 of the prospectus explains:
at present performance levels, Railtrack will be making significant net payments to the train operators".
It goes on to say that Railtrack will have to make those penalty payments to train operators for things that are outside its control, such as severe weather, as well as for things within its control, such as industrial action. The prospectus states that Railtrack has been allowed an additional £75 million per year in access charges in order to cover what it might have to pay out in those circumstances.
Page 41 of the prospectus explains that the company directors, having assessed what improvements they can make to Railtrack's performance, still
do not believe these improvements will be sufficient to match
the amounts allowed for penalty payments in the Government's figures. That is a very serious point when considering the company's viability.
At the top of page 42—hon. Members may wish to check it—the prospectus says that, under the arrangements, a single day's cessation of train services will cost Railtrack about £12 million. According to my rudimentary calculations—the sum is not difficult: even Conservative Members could do it—Railtrack has enough money put by in the £75 million allowance for fewer than seven days' loss of services. In summer 1994, services were lost for 18 days.
After the first seven days, every additional day's lost service will cost Railtrack £12 million out of its profits. The big question is: how long could Railtrack last in those circumstances? Are Mr. Horton's management skills considered so great that he can do now what he signally—if I may use that word—failed to do in 1994?
Railtrack's profit last year, as stated on page 63 of the prospectus, was £189 million before tax. If one adds to that the whole £75 million additional penalty allowance, I calculate that Railtrack's annual profit would be wiped out in 22 days.
But the position is far worse than that. Page 66 of the prospectus shows that last year, with no days of complete cessation of train services, Railtrack still paid £80 million in penalties—that is £5 million more than the £75 million that is allowed for. If one assumes that the allowance is used up by ordinary disruption—as it was last year—Railtrack's profit would be extinguished altogether after fewer than another 16 days' lost train services. That is a very serious matter.
When the chairman of the British Railways Board—I remind the House that he is a Tory appointee—writes to the permanent secretary to the Department of Transport complaining that "material information for investors" on a desperately important subject has been left out of the prospectus, the country can see for itself that the Government, who have been consistently tainted by sleaze and underhand dealings, are prepared to sell Railtrack on a false prospectus.
I am conscious that the Government are keen to shift attention from the damage that they are doing to the railways to what Labour will do about it, assuming that we win the next election. I have said before that it is rather like a vandal who is about to destroy a monument saying to the caretaker of that monument, "Tell me how you will

restore the monument after I have destroyed it." The answer is simple: do not destroy the monument. How dare the Government ask us what we will do to put right the destruction that they are imposing on the nation?

Mr. Andrew Robathan: The hon. Lady will be astonished to discover how much we agree about encouraging passengers and freight back to the railways. However, she described British Rail as a monument. Although some people are working very hard to encourage people on to the railways, unfortunately British Rail is a monument to the uselessness of a nationalised industry.
When the hon. Lady and I were born, there were 15 railway stations in my constituency. They have all been closed by nationalised British Rail. In the hon. Lady's constituency, there used to be a railway line from Handsworth towards West Bromwich, and from the centre of Birmingham near New Street station past Winson Green. Those lines were closed by nationalised British Rail. How can the hon. Lady describe British Rail as a monument?

Ms Short: The hon. Gentleman will be interested to know that we are about to build a metro on that line, which runs through my constituency. That will be a lovely advancement of public transport provision for Birmingham and my constituency, and we look forward to it very much indeed.
I agree with the hon. Gentleman that the old British Rail was far from perfect, and that we need a higher quality model to achieve the levels of investment and the use of the railway to meet future needs; but it is absolutely clear that the old British Rail was better than the privatised model. That is proved by the fact that, each year, the Treasury has had to find an extra £850 million to provide lesser services from the privatised model than we had under British Rail. If something is imperfect, we should not make it worse; we should try to develop something better.
We in the Labour party are keen to be absolutely clear and straight with anyone contemplating investment in Railtrack. In my Swindon speech, which is printed in full in the prospectus, I set out our intentions. We want to be straight with all potential investors about the intentions of an incoming Labour Government.
I shall not dwell on those plans today, because today's aim is to halt the sale, but we have made it clear that a Labour Government will use all the levers at their disposal. We shall use the power of regulation, the power of the £2 billion subsidy, and the power to acquire ownership to reintegrate the railways under a renewed British Rail and to mobilise public and private partnership to increase investment in rail and secure the increase in passenger and freight use that the country needs.
I should say something about regulation, because many of the commentators on my Swindon speech missed an important point. We want all potential investors to be clear about our intentions.
The power of regulation over the railways is significant. The Rail Regulator is more powerful than any of the other utility regulators and his reach into the heart of Railtrack's business is far deeper. The powers exist now, and they will be useful to the new Government.


The existing mechanisms give the regulator considerable powers to secure changes to the regime as it applies to Railtrack. They do not require negotiation with Railtrack or its agreement; they can be effected, if necessary, against the wishes of Railtrack. Those changes may be made to alter Railtrack's obligations, and thus its priorities, in order to achieve the objectives of the public interest rather than those of the shareholders.
To place our hands directly and securely on those powerful levers of control and immediate change, we shall need only a simple amendment to the Railways Act 1993—to make the Rail Regulator answerable to the Secretary of State, and therefore the public interest, to a far greater extent than is now the case.
When that has been achieved, the new Labour Government will have at their disposal all—or substantially all—the means to control the economic behaviour of Railtrack in significant areas. Those include the direction of Railtrack's investment spending, controls on its access charges, restrictions on the disposal of its valuable land assets, and the possibility of a clawback on substantially all its property disposal income. I ask potential investors to look carefully at what I said about regulation in my Swindon speech, because the use of regulation to protect the national interest will change the likely rate of return to shareholders.
There it is. The sale of Railtrack will be deeply damaging to the national interest and terribly costly to the taxpayer.

Mr. Andrew Rowe: rose—

Mr. John Home Robertson: He is going to join the Labour party.

Mr. Rowe: As Madam Speaker said earlier, one should not believe everything one reads in the newspapers.
Will the hon. Lady explain whether the powers that she proposes to take over Railtrack will return to profitability the company that she has just portrayed as certain to lose money?

Ms Short: The powers that I described are intended to be used to ensure that Railtrack serves the national interest, and does not seek to maximise short-term profit and damage the national interest. The powers will be used to get more investment in rail and to develop greater use of rail, which is what this country's future and its transport needs require.

Mr. Nick Hawkins: Will the hon. Lady explain why she is so proud of nationalised British Rail when, particularly under the last Labour Government in the 1970s, BR was not merely a national but an international joke?

Ms Short: That was not a terribly impressive joke, either. I do not know whether the hon. Gentleman was listening when I answered the hon. Member for Blaby (Mr. Robathan).
The old British Rail was not perfect, but the privatised structure is worse. An incoming Labour Government will create something better. If the hon. Member for Blackpool, South (Mr. Hawkins) supports the Government tonight, he

will be helping to create something massively more costly and massively worse than the old British Rail. Conservative Members must face that fact.
I was saying that the sale of Railtrack will be deeply damaging to the national interest and terribly costly to the taxpayer. The privatised structure will also prevent any expansion in rail use. It is in the national interest that the sale be halted. If it is not, we are confident that an incoming Labour Government can reintegrate rail, and mobilise higher levels of investment and use. We will do that, but the present Government must take responsibility for the damage and the waste of taxpayers' money that they are causing now. The House has the opportunity today to stand up for the national interest. I hope that that opportunity is taken.

The Secretary of State for Transport (Sir George Young): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
congratulates the Government on the progress that it is making with privatisation, with the franchising in the last three weeks alone of the InterCity East Coast, Gatwick Express and Network South Central lines, offering the prospects of better services and higher investment at less cost to tax-payers; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as a golden opportunity for the railways to gain access to the private finance necessary for investment, and for people to become real stakeholders in the railways, thanks to the Government's policy of wider share ownership".
How relieved we are that the hon. Member for Birmingham, Ladywood (Ms Short) has been allowed to open the debate and give her overworked deputy a much-needed break. After the events of the weekend, we were concerned that the shadow Home Secretary might have dreamt up some new and terrible punishment for the hon. Lady. I quote the words of a senior Blair aide in The Guardian today:
She accepted that she has screwed up big time.

Ms Hilary Armstrong: Will the Minister give way?

Sir George Young: No, because I would like to cover a little of my journey before I pick up my first passenger.
Even the mild-mannered Opposition Chief Whip was obliged to pick up his pen to write an article that also appeared in The Guardian this morning. He used politer language, but none the less delivered a public rebuke under the trendy headline, "Don't rock the roll". We only wish that this debate could take place at 8 am on Sunday, as that is when the hon. Member for Ladywood speaks without restraint.

Ms Armstrong: rose—

Sir George Young: I shall give way in a moment.
Many Conservative Members can remember the days when Labour Members might have been criticised for suggesting that taxes on middle incomes should be cut. Not long ago, Labour voted against such reductions on a three-line Whip.

Mr. Peter Hain: On a point of order, Madam Speaker. Could the Secretary of State advise the House what on earth his speech has to do with the subject that we are discussing?

Madam Speaker: Order. The Secretary of State should be allowed to develop his speech. He has been on his feet for only one minute.

Sir George Young: The hon. Member for Ladywood spoke briefly about tax at the beginning of her speech. I remind the Opposition that Labour's former deputy leader, another distinguished Birmingham Member of Parliament, said:
Labour now has a clear choice. It can be either the party of higher taxation and proud of it, or the party of higher taxes which it is ashamed to describe, afraid to admit and incapable of calculating with any accuracy. It cannot be the low taxation party.
Those are the words of a former deputy leader of the Labour party.

Ms Armstrong: Does the Secretary of State think that it was the press that gave the real comment on Tory tax policies this weekend? Was not it the electors of South-East Staffordshire?

Sir George Young: I now regret having given way on that point. [HON. MEMBERS: "Oh."] The criticisms of the hon. Member for Ladywood have not come from Conservative Members: they have come from the Labour leader's office. It is absurd for the hon. Lady to be criticised for articulating a belief that united Opposition Members when they joined the Labour party. One can but contrast the way in which the leadership embraced and protected the hon. Member for Peckham (Ms Harman) for sending her son to a grammar school and silenced the hon. Lady.

Mr. Andrew Faulds: On a point of order, Madam Speaker. Some of us are somewhat bored with this dissertation on other matters. Could we revert to the topic of the debate?

Hon. Members: Hear, hear.

Madam Speaker: Order. I see the amendment standing in the name of the Prime Minister. We have had a good bit of knockabout and now perhaps we might revert to the amendment.

Sir George Young: I conclude my opening remarks by saying that the hon. Member for Peckham was endorsed for acting like a Tory and the hon. Member for Ladywood was rebuked for speaking like a socialist.
I welcome the opportunity presented by the debate for three reasons. First, I wish to remind the House why the Government believe that their policies for the railways are the right ones to reverse decades of decline. Secondly, now that we have made further progress with those policies—drawing in private sector funds to complement those of taxpayers, attracting into the industry fresh skills and talents to work alongside those already there and restructuring the industry so that it focuses more clearly on its customers—we can stand back for a moment, look at some of the fears that have been expressed, including

some of those mentioned by the hon. Member for Ladywood, see whether they are justified and examine the achievements to date. Thirdly, I wish to contrast the clear vision that we have of tomorrow's railway, and our resolution to secure it, with the muddled, divided views of the Labour party and the trade unions that support it and the vagueness of their purpose. Then I wish to ask the House who is more likely to deliver the expanding, confident, well-resourced railway that the whole House wants to see.

Mr. Denis MacShane: Will the Secretary of State give way?

Sir George Young: In a moment.
Which is more likely to deliver? Is it a party that opposes privatisation and thereby denies Railtrack access to fresh funds and, at the same time, refuses to make similar funds available from the public sector? That party offers no future to the railways.

Mr. MacShane: rose—

Mrs. Alice Mahon: rose—

Mr. Bruce Grocott: rose

Sir George Young: I shall give way to the hon. Member for—

Madam Speaker: Halifax?

Sir George Young: No, to the hon. Member for The Wrekin (Mr. Grocott).

Mr. Grocott: If the Secretary of State is determined to persist with the sale of the land and assets of Railtrack, which currently belong to my constituents, to me and to the whole of the population of this country, against our wills, can he at least tell us when we shall each receive the cheque for the sale of our assets and how much it will be?

Sir George Young: The hon. Gentleman knows that Railtrack will be sold at the end of May. There will be a receipt for the taxpayer that goes into the Exchequer. He also knows that under a privatised railway, the costs of funding investment will no longer fall on the taxpayer. They will fall on the privatised railway. I hope to show that investment in the railway will increase at a faster rate than if it had remained in the public sector. That is the kernel of the case for privatisation.

Dr. Robert Spink: Will my right hon. Friend confirm, in setting the context of the debate, that the five franchises that have so far been let will all be run at a lower cost by those who have taken them than the cost at which British Rail runs them, and will all provide better services for my constituents?

Sir George Young: I hope to make exactly that point.

Several hon. Members: rose—

Sir George Young: No, I shall not give way. I want to make some progress. I shall not give way for the time being.

Mr. Home Robertson: I want to be helpful.

Sir George Young: Even with that kind offer, I am not giving way to the hon. Gentleman for the moment.


When the House voted the Railways Bill on to the statute book in 1993, it took a decisive step to reverse the historic decline of the railways. That decline, as my hon. Friend the Member for Blaby (Mr. Robathan) said in an intervention, had seen the industry's share of the market shrink from 17 per cent. in 1953 to 5 per cent. now. Its share of the freight market had dropped even more dramatically. The era of nationalisation was marked by poor industrial relations, low productivity, rising fares and an attitude towards passengers and freight business that was often patronising. It is hardly surprising that those users stayed away.
The old railway was a monolithic, monopolistic, slow-moving nationalised industry, which never had the inclination or the initiative to focus on the needs of its passengers and freight users. Yet it was an industry full of talented and committed people, shored up with vast quantities of taxpayers' money.
How did the industry fail? It failed because it was insulated from commercial pressures. It failed also because, as a public monopoly, it never had to confront long-term competitive challenges from other forms of transport. Similarly, it failed because it looked inwards at itself, not outwards towards its market, both passengers and freight. Taxpayers' money went into the industry and disgruntled users came out.
British Rail failed to recognise the golden rule of service industries: the customer is king. There were several attempts to solve the problem by throwing money at it. But cash alone could not and cannot halt the railways' downward slide. The basic problem was structural rather than financial.

Mr. Robathan: My right hon. Friend will have heard British Rail compared recently with a monument. To what does he think British Rail would be a monument?

Sir George Young: It is a monument to post-war public industry, a monument that is now out of date. There are better ways of running our railway system than having it as a monument. Our policy, as set out in the Railways Act 1993, was directed to the problem for the first time. Its basic message was that the railway system could revive its fortunes only if it were given commercial incentives to win back passengers and freight. The policy built on the successes of previous privatisations, from British Telecom to British Airways. It adapted the main features of those privatisations to the unique circumstances of the railway industry.
The Act brought in a new era, in which private sector dynamism could replace years of public sector stagnation. It introduced a new regulatory system to protect the public interest. It represented a recognition that investment in a publicly owned body would always have to compete with investment in health and education. By placing the railways firmly in the private sector, we would be able to free investment from that constraint.

Mr. MacShane: In the wonderful world that the Secretary of State is describing, why is the franchising director saying that the number of services to Doncaster from London will be cut by half under privatisation? That is a deplorable attack on the business community in South Yorkshire.

Sir George Young: The hon. Gentleman has confused the passenger service requirement with the level of service that emerges at the end of the franchising process.
Our policy recognised that other transport operators—ferries, buses and airlines—might have skills that could help regenerate an important but declining industry. That was the philosophy behind the 1993 Act. Nothing has happened in the past three years to challenge either our analysis or proposed solution.
I now come to the progress to date. We have been fed a constant diet of scare stories on rail privatisation by the Opposition, and by others: that fares would escalate; services would be cut; investment would fall; the railways would be less safe; people would not bid for the franchises; the Labour party would stop the flotation of Railtrack; and, if it did not, no one would want to buy the shares. I shall go through those accusations and contrast the rhetoric with the reality.
Passengers were told that their services would be cut. The fact is that the franchises awarded so far are all based squarely on existing levels of service. South West Trains has already introduced new co-ordinated bus links to rail stations and embarked on a £3 million programme of improvements to station and passenger facilities such as security, lighting, waiting rooms and information services. It also plans to improve business travel services, to offer new concessions for senior citizens and to restore or expand services to Epsom, West Croydon, Southampton and Salisbury.
Great Western plans to introduce more trains, faster journey times, refurbished rolling stock, a Motorail service between London and the west country, new bus links to rail services, increased capacity for bicycles and a radically improved telephone inquiry service. London and South Coast, which won the Network South Central franchise, plans to introduce new services in south London.
The Gatwick Express franchisee has similar improvements planned: a better passengers charter, new off-peak discounts, and on-board check-in facilities for club class passengers.

Mr. David Chidgey: I thank the Secretary of State for giving way, as he flashed through my region so fast that I could hardly catch his eye. I refer him back to South West Trains. As some constituency examples have already been given, I hope that he will bear with me. Is he aware that the 8.50 train from Waterloo to Poole, which should have passed through Eastleigh this morning at approximately 9.30, was, unfortunately, mistakenly signalled on to the Salisbury line? One does not have to be a railway buff to know that the line from Waterloo to Weymouth, which goes through Poole, is electrified. The line to Salisbury is not. So, consequently, the train ground to a halt just west of Basingstoke, where the staff on the train led passengers to safety by torchlight. Is that the new, modern railway that the Secretary of State talks about?

Sir George Young: The crucial difference between the new regime and the old is that, under the old regime, there would have been no commercial penalty on British Rail whatever. Under the new regime, there are financial incentives on Railtrack and on the franchise operator for trains to run on time. For the first time, we have a


commercial structure that will reward operators that run trains punctually and penalise those that do not. That incentive never existed with British Rail.

Mr. David Tredinnick: Will my right hon. Friend give way?

Sir George Young: I shall give way once more, but then I must make some progress.

Mr. Tredinnick: Is my right hon. Friend aware that some of the improvements that Great Western proposes were also proposed by the Great Western Railway in 1946, but were never implemented while the industry was nationalised?

Sir George Young: My hon. Friend makes a powerful case for the reinvolvement of the private sector in the railways, and I am grateful to him.
Passengers were also told that they would lose key network benefits, but the fact is that through tickets, discount cards for the young, the elderly and disabled people, impartial sales information and the telephone inquiry network are legally safeguarded as a result of privatisation. We were then told that franchising would drive up fares. The fact is that for the first time ever, as an integral part of privatisation, key fares such as saver tickets and standard weekly seasons have been capped. They have been pegged to inflation since January and will begin to fall below inflation in just over two years. Contrast that with a real increase of 22 per cent. under the previous Labour Government.
Everyone has been told by the Opposition that investment would fall off once services were franchised. The fact is that each of the new franchisees plans new investment in the network: refurbished rolling stock, upgraded passenger security and better facilities for disabled people. The National Express group, which will run the Gatwick Express service, plans to have completely new rolling stock by 1999. Great Western will refurbish its entire fleet of high-speed trains. The franchisee on the InterCity east coast line plans to spend more than £17 million on service enhancements, including £7 million on improvements to the reliability of the class 125s, new passenger lounges and passenger security.

Ms Armstrong: rose—

Sir George Young: I shall certainly not give way to the hon. Lady again. It is nothing personal.
The Network South Central franchisee, London and South Coast, will spend a further £10 million over the next three years on improvements to rolling stock and stations.

Ms Glenda Jackson: Will the Secretary of State give way?

Sir George Young: Not now; I might do so later.
I am pleased to be able to tell the House that the franchising director announced today that shortlisted bidders for the South Eastern franchise would be asked to bid on the basis of a 15-year franchise, and that their

proposals should include the replacement within three years of all 83 of South Eastern's class 411 units, most of which are concentrated on the Kent coast line.

Mr. Rowe: Has my right hon. Friend any idea of the number of occasions on which Kent Members have either visited or written to the directors of British Rail demanding the upgrading of rolling stock? Does he realise how much glee will greet one of the first fruits of privatisation—the fact that the rolling stock that British Rail consistently refused to give us has now been promised?

Sir George Young: My hon. Friend's prayers have been answered. I know that he and many other Kent Members, some of whom are present—my hon. Friend the Member for Dover (Mr. Shaw) is not; he is in a Select Committee—will welcome this afternoon's announcement by the franchising director.

Ms Short: The trouble is that reality is completely different from the promises that are made. Can the Secretary of State explain why, if there are so many new orders, there has been a massive slump in investment? The ABB carriage works in York have closed, and all the rail manufacturing companies are laying off skilled workers and are desperately concerned about their future. Reality is not as the Secretary of State describes it.

Sir George Young: The key difference between the hon. Lady and me is that I am able to make an announcement that will have no impact on public expenditure. The hon. Lady can make no such commitment, because she is committed to public sector procurement, and her hon. Friend the Member for Dunfermline, East (Mr. Brown) will not allow her to make a commitment such as the one that I have just made to the House.

Mr. Bob Dunn: My constituents—Kent commuters—will benefit enormously from my right hon. Friend's announcement. The county of Kent has battled long and hard. When does my right hon. Friend expect the new trains to be in service?

Sir George Young: They will be available within three years. I am delighted that the private sector has been able to provide what the public sector could not.

Mr. Hugh Bayley: Will the Secretary of State give way?

Sir George Young: No. I want to make some more progress.
The franchisee will also be required to put forward proposals to replace all the remaining 95 units of slam-door rolling stock. That will mean that, together with the new Networkers already operating on the inner suburban services, South Eastern will have a completely updated fleet. As we have just heard, my hon. Friends who represent the people of Kent have argued for many years that more rolling stock investment is needed on their rail services, and franchising will give them that investment.


We have sold the three passenger rolling stock leasing companies to increase the possibility of new and refurbished rolling stock. In the short time during which they have been in the private sector, one of those companies, Angel Train Contracts, has announced a £400 million funding facility for new train building and refurbishment. In addition, on 2 April Porterbrook Leasing announced a £75 million-plus programme of refurbishment to its mark III fleet, which is good news for service on mainly the cross-country, midland main line and west coast main line.
We were told that franchising would cost taxpayers more. In fact—as my hon. Friend the Member for Castle Point (Dr. Spink) implied—the first five franchises alone will be funded in the private sector, by year seven of the franchises, to the tune of £95 million, compared with British Rail's current £300 million. That is over one third of the franchises costing taxpayers over two thirds less. GNR even plans to need no subsidy at all by the end of its franchise. The Gatwick services will pay taxpayers a growing dividend year by year. By any standard, that represents a huge reduction in the cost to taxpayers of running rail services. If savings on that scale are repeated throughout the country, in a few years, the subsidy bill for the railways will be reduced substantially.

Mr. Hawkins: Does my right hon. Friend agree that what he has just said once again shows the success that this privatisation will be, in taking the burden away from the taxpayers, producing profits for them and improving services, just as the privatisations of British Telecom and British Airways did? Does he also agree with my prediction that very shortly the Labour party will realise how successful and popular privatisation is, as it did with British Telecom and British Airways, and its policy will change such that it will claim that it was its idea all along?

Sir George Young: We might have to wait a year or two before that flash of inspiration. My hon. Friend is right. Not only will privatisation reduce the cost to taxpayers, but it will improve services and there will be more investment by the franchisees. So it is a win-win situation.
We were told that safety would be jeopardised by privatisation. Railways continue to be the safest form of land transport. The independent Health and Safety Commission has confirmed that there is no evidence of any overall decline in health and safety standards since Railtrack was set up. Indeed, recent statistics show some improvement in safety standards. In 1994–95, the number of significant rail accidents fell and total fatalities on the network, excluding trespassers and suicides, fell to their lowest ever level.
Railtrack has made it clear that safety is its first priority. It is in the company's commercial interests to provide demonstrably safe service to attract and retain customers. British Airways' move to the private sector has not compromised safety. I should make it clear once again that I am not complacent about safety. I expect it to remain the paramount concern of everyone in the rail industry.

Mr. Tam Dalyell: The Secretary of State will know that the Health and Safety Executive has published a report on the Forth rail bridge, the south end of which is in my constituency. Paragraph 100 of its report says:

While the general condition of the bridge does not give rise to immediate concern in respect of its carrying capacity, some members have suffered a loss of section due to corrosion to an extent which makes repair or replacement necessary as part of a planned maintenance strategy.
Apart from the fact that the bridge is the greatest monument to 19th-century civil engineering anywhere in Europe, the entire question of the railway system north of the Forth should be addressed. Will the Minister who winds up give a considered answer about how the Government view the financing of the work that the Health and Safety Executive thinks is of great importance?

Sir George Young: I shall certainly see that my hon. Friend the Minister gives the hon. Gentleman the considered reply for which he has asked. As I am sure the hon. Gentleman knows, the HSE report confirmed that the bridge is safe. Railtrack fully accepts that the bridge requires a thorough maintenance regime and it is fully committed to the HSE recommendations.
We were also told that Labour would stop privatisation. It said that it would stop us in the Division after Christmas; it has said that it will stop us today, and it will be wrong again.
Then we were told that nobody would want to buy shares in Railtrack. On Monday, we published the pathfinder prospectus, announcing the sale of substantially all the Government's shares in the company and giving details of the first instalment—

Mr. Brian Wilson: rose—

Sir George Young: I should like to finish this paragraph before giving way to the hon. Gentleman, and then I must make some progress. We also gave details of the timetable. Further pieces of the jigsaw will be put in place over the next two weeks, culminating in the publication of a price-ranged prospectus on 1 May. The public will then have another two weeks to apply. We expect the start of dealings on 20 May. One million prospective shareholders are now registered with share shops. They are ordinary investors like all those who have followed and supported the Government's programme of privatisations since we took office, which is why there are almost 10 million shareholders compared with fewer than 3 million in 1979.
The Daily Telegraph reported yesterday:
One of the largest stockbrokers in the country, Sharelink, said the number of people registering for the sale next month was already twice its expectation".
So much for the Labour party's claims that the public are not interested in the privatisation.

Mr. Wilson: My hon. Friend the Member for Birmingham, Ladywood (Ms Short) referred to the letter that the chairman of British Rail sent to the permanent secretary at the right hon. Gentleman's Department on 2 April, which stated categorically that the prospectus was deficient and misleading in many highly significant and influential respects. Since then, no alteration has been made to the prospectus. As the chairman of British Rail and the prospectus cannot both be telling the truth, does the Secretary of State agree that a stock exchange inquiry is required to find out the truth?

Sir George Young: Certainly not. Mr. Welsby was responding to a request from my Department as part of


the process of writing the prospectus. We received a comprehensive response from British Rail, which has been considered carefully as part of the process of finalising the prospectus. For example, the prospectus now contains a full statement by the Rail Regulator, setting out his views on investment. Railtrack has addressed British Rail's specific concerns on the west coast main line modernisation. The directors of Railtrack Group plc have a duty to ensure that, to the best of their knowledge and belief, the information in the prospectus is in accordance with the facts and contains no material omissions. I am confident that the prospectus issued on 1 May will fully satisfy those requirements.
Rail staff will also benefit from share ownership. Railtrack's staff will be offered special share offers, such as free shares, up to £500, plus more for each year of service, and discounts of 20 per cent. Great Western last month offered more than half the shares in the company that won the franchise to all its staff. Those on offer were priced at 50p with a minimum stake of £100, and the company is so keen to encourage its staff that it is matching the first 200 shares purchased. That is what Conservative Members call real stakeholding.
I am sure that many trade union members, who sponsor so many Opposition Members, will take up those offers. As The Guardian put it yesterday,
For those prepared, however, to put the moral outrage to one side and consider Railtrack's possibilities in the private sector, the prospects could be quite alluring. It is a classic utility business with possibilities for ratcheting down costs through new technologies such as modem signalling systems; ending Spanish practices in the labour force and outsourcing some services. Who knows, Railtrack, like another transport firm British Airways, could well prosper in the private sector.

Mr. Keith Hill: Will the Secretary of State give way?

Sir George Young: I shall give way one more time, and then I propose to make progress.

Mr. Hill: I presume that the Secretary of State is an enthusiastic fan of the £69 million flotation sweetener out of the so-called "profits" of Railtrack. Can he inform the House where those profits have arisen from? Is he aware that, last year, Railtrack salted away £150 million out of its maintenance programme? That money, which should have been spent on maintenance, is now being distributed to potential shareholders. Will not the motto of Railtrack in future be, "Putting profits before passengers"?

Sir George Young: The hon. Gentleman knows that Railtrack is heavily regulated, and has been told by the regulator to reduce the access charges that it charges the train-operating companies. The companies will be operating within a tough regulatory regime. No money is "salted away", to use his expression—that money is needed to invest in, modernise and improve the nation's railways. The existence of the dividend will impact on the value of the shares when they are floated, so that the interests of the taxpayer will be fully safeguarded.

Sir Michael Grylls: Will my right hon. Friend be gentle with the Opposition, as this is

a sad day for them? They are seeing the last of the great state corporations demolished and returned to the private sector. He should be sensitive, if I may say so. It is a happy day for the traveller, but a sad one for the Labour party.

Sir George Young: Even sadder is the fact that Labour cannot give a commitment to buy it back, and I shall say a word about that in a moment.
Having disposed of some of the myths, let us look at the reality. Nearly half the rail industry—some £4 billion-worth by aggregate turnover—has been transferred to the private sector. That is made up of 51 businesses, including the five franchises that we have awarded so far. We have sold the three rolling stock companies, as the press has reported, for £1.8 billion. We have made good progress with the sale of BR's freight businesses. Rail Express Systems and the trainload freight companies have been bought by North and South Railways, a consortium led by Wisconsin Central Transportation. Wisconsin has a wealth of railway experience from around the world and will bring new ideas and successes to rail freight in Britain. It has plans to invest heavily in new locomotives. In the private sector, those businesses will have commercial incentives to win freight traffic from the roads.
The public want an improved railway service, and the key to that will be the sustained programme of expenditure on the infrastructure that Railtrack intends to undertake. That expenditure amounts to some £9 billion at current prices over the next five years—a significantly higher level of expenditure than Railtrack has managed under the public ownership and public accountability so beloved of Opposition Members. In practice, that expenditure could not be achieved without substantial private sector finance. I believe that Railtrack's privatisation will unlock the barriers to that private investment in our railway infrastructure. Those are the facts.

Mr. Gordon Prentice: Will the Secretary of State give way?

Sir George Young: No. I said that I had given way for the last time, and I meant it. I have given way fairly generously in the course of my remarks.
Let me return finally to the alternative—to the policy vacuum on the Labour Benches. Last winter, we were treated to the unedifying sight of the Labour party in search of a policy for rail. It was like a tank engine, going backwards and forwards in a goods yard. That culminated in the speech in Swindon last month by the hon. Member for Ladywood, purporting to explain Labour's ideas. That speech was an insult to a great railway town. If her doom-laden analysis of the railways is right, her solution is wholly inadequate. If it is wrong, her solution is irrelevant. Either way, her speech in Swindon was incoherent intellectually and financially.
The rhetoric of old Labour, with its party conference call for public ownership, sits uneasily with the so-called reality of new Labour and the avoidance of commitments. Its policy statement said much about the tensions in the Labour party, but very little about the needs of a modern railway. First, Labour Members talk of an integrated railway system. What do they mean by that? Under this


Government, we have increased the integration of the railways into other transport systems. We have opened new lines such as the Robin Hood line in Nottinghamshire. We have opened more than 200 stations, whereas under Labour more than 600 were closed. Thanks to the private train operator, South West Trains, we now have new bus services in Hampshire linking towns to those with train stations. That is what any sensible person would call an integrated transport system. And, of course, we are extending the rail network, and knitting it closer together, with Thameslink 2000 and the channel tunnel rail link, taken forward by a private sector company under our private finance initiative.
Then the hon. Member for Ladywood talks of a "reconstituted British Rail". There will not be much, if anything, left of British Rail to reconstitute by the time of the next general election. Much of what was British Rail Labour has agreed not to buy back. We have already got about £5 billion-worth of the old BR either sold or on the market, with the remainder following on apace.
Let us recall Labour's views on all this. It has already said that it will not break any contracts. That means that, even if Labour was in office, it could not renationalise the franchises, which could remain privately run, for the life of the next Parliament. It has also said that it would not buy back the rolling stock, the freight or the maintenance units. It is now in the absurd position of claiming to be opposed to the flotation of Railtrack, while at the same time refusing to say whether it would buy it back. Under a Conservative Government, it says that Railtrack must be publicly owned. But, if there were a Labour Government, it could remain privately owned. Where is the sense or logic in that?
Then the hon. Member for Ladywood promised tougher regulation. I wonder whether she has seen the article in The Independent on 15 April. Under the headline, "Labour to woo British Gas by scrapping regulator", we see a different line from the hon. Member for Leeds, West (Mr. Battle). The article says:
He is keen to stress that those in his party who have what he terms 'a 1940s to 1960s mindset' will have their hopes of possible renationalisation dashed, and that it is crucial that the regulatory framework is simplified to make the companies' lives easier.
He is quoted as saying:
I do not want them to be like Gulliver, tied down with millions of little ropes. That is the problem with over-regulation. Provided they maintain their social obligations the size of their profits is up to them.
The hon. Lady is promising more regulation, while one of her colleagues is promising less regulation of another former nationalised industry. It is small wonder that neither the travelling public—

Ms Short: rose—

Sir George Young: I shall not give way to the hon. Lady as I have already done so—I have given way for the last time.
It is no wonder that neither the travelling public nor the City has taken much notice of the Labour party's rail proposals. Indeed, The Sunday Times reported last week:
Labour's transport spokeswoman has huffed and puffed, but has failed to blow rail privatisation down.
A lot of people want to know about the Labour party's policies on fares, services, public subsidy and investment. The Labour party talks glibly of higher levels of

investment, but it does not say where the money would come from—perhaps from higher taxes on Members of Parliament?
We are the only party with a clear strategy to bring more investment into the railways—from the private sector, not from the taxpayer. Perhaps the hon. Lady would rather have higher borrowing. Or would she do what Labour did before and close branch lines and stations? The hon. Lady clearly admires the French railways. I read a flattering article that appeared in The Guardian today, in which she stated:
I have assembled a policy which will give us a better railway … It'll be like the French side of the Channel Tunnel".
I wonder whether she is aware that the French railways announced earlier this year that they are £27 billion in debt. Is that a model that we should seek to emulate? Perhaps her investment pledge would be paid for out of higher fares. The Labour party has never said what it would do about fares. Does the hon. Lady think that fares should be higher, to finance more spending on the railways? Or should they be lower, to encourage more people to travel by train? Or will she admit—as she has done with much of the rest of our privatisation policy—that we have got it about right? We hope to get an answer from the hon. Member for Cunninghame, North (Mr. Wilson), a man of less ambition than the hon. Lady—while she wants my job, he just wants hers.
I strongly believe that the railways should have a more important role in tomorrow's transport world, and I believe that our policies will secure that role. I have no confidence that the Labour party knows what to do with the railways. The Labour party is ashamed of its past, silent on its future and not fit to govern. I urge my hon. Friends to join me in voting tonight to ensure a better future for the railways, for taxpayers and for Britain.

Mr. Tam Dalyell: I shall concentrate on one narrow but desperately important aspect: the future of the Forth bridge. It is not just any bridge—it is the greatest monument to engineering of the 19th century. The whole railway network depends on the Forth bridge—to Fife, Dundee, Aberdeen, the North sea oil industry, Inverness and points north. This is not a trivial matter.
I am glad to have the Secretary of State's attention because I do not put this issue forward in a partisan way. I recall that it was action in the House that shamed the Health and Safety Executive and Ministers into having a report that was conducted under distinguished engineers. I shall make my points from the results of the report. My hon. Friend the Member for Midlothian (Mr. Clarke), the former Secretary of the National Union of Miners, Scotland, who knows a good deal about engineering, and my hon. Friend the Member for Cunninghame, South (Mr. Donohoe), who was a steel worker before he came to the House of Commons, and I were cautiously taken over the bridge by Paul Prescott, the director of Railtrack. One just cannot wander on to the bridge—the up trains and the down trains have to be stopped. We were treated most courteously in being taken over to see for ourselves.
I have loved the bridge since childhood and I was shocked by whole globules of paint coming off and by rust setting in—after all, rust never sleeps. I was shocked when I went up to the Jubilee, or South tower to examine the mess—which is called the guano in the report—in


many of the nooks and crannies. It may be that no damage has been done yet, but cosmetic damage soon ceases to be cosmetic.
First, I shall concentrate on the condition of the bridge. The report states:
Although some corrosion was found on the primary structure members, it was judged that the level of corrosion found was not significant in the structural analysis.
I do not want to be alarmist—and here I share the view of the Secretary of State—but
The level of corrosion on some of the secondary members which brace the main structural members, was found to be higher with significant section loss having occurred. Although not critical to the present structural integrity of the bridge, these damaged members need to be repaired or replaced. Repairs of this nature have routinely been carried out to the bridge in the past.
The expression "being painted like the Forth bridge" has crept into the language but there is a problem. For 90 years, painting was done in the traditional way with slings. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) will know that several families around South Queensferry, which he knows well, for generations devoted their lives to the maintenance of the bridge. The Marshall family of Dalmeny station lost both husband and son on different occasions in painting the bridge. A good deal of blood has been spent, not only by the builders but by the maintainers.
I am the first to say that the Health and Safety Executive was justified in introducing new regulations but, of course, they make maintenance of the bridge more difficult and more expensive than when it was done by the old ways. My reply is that, with modern materials—especially fibreglass materials—it should, with money, be possible to conduct that maintenance. I must impress on senior Ministers that once rust gets a grip of any of the major structures, heaven knows what the cost would be of repairing it or whether it could even be done. If ever a domino theory were to operate, it would be in that complicated structure.

Mr. Dover: Does the hon. Gentleman accept from me, as a civil engineer and Chair of the Select Committee that considered the Severn second bridge, that much more extensive repairs were necessary on the Severn bridge? They were done by Laing-Entrepose, a private sector UK-French joint consortium, at a cost of tens of millions of pounds which was obtained by charging river crossing tolls. That paid not only for the repair work but for a new crossing, which is to be handed back to the Government after 20 years. Is there any difference between that and what the Government propose for the Forth bridge? A privatised company will levy the Railtrack charges to make sure that the repairs are done more than effectively.

Mr. Dalyell: The hon. Gentleman rendered a service to the House in his studies of the Severn bridge. The Severn bridge is not unlike the Forth road bridge. I am told by Professor Paul Jowett of the department of engineering at Heriot-Watt university and some of his colleagues that it would be much easier to repair the Forth road bridge—and, therefore, a bridge of the Severn type—than it would be to repair a structure of the 1880s and 1890s, when techniques and materials were very different. Perhaps the hon. Gentleman will accept that it is a different problem. It is certainly an exceedingly expensive problem.
The report also referred to the problem of access to the tubes, which is through small inspection hatches. It continues:
the tubes themselves are confined spaces. In the areas inspected by Pell Frischmann"—
the firm that carried out the work—
the steel was found to be in good condition and it is considered that there is no significant corrosion inside the tubes. The inspection hatch covers were removed some time ago and, as a result, there is an accumulation of guano and other detritus which needs to be removed.
I gather that removal would be quite expensive.
I have a greater concern, which has arisen since publication of the report. Rightly or wrongly, Scottish Power had the idea of floodlighting the bridge. A number of holes had to be bored in the old structure to arrange for floodlighting. I have not seen the holes because access is impossible, but I am told by John Watson, the ferryman, who has an honourable record of campaigning for the maintenance of the bridge, and his successor Colin Aston that it is likely that rust is forming in the holes drilled for the wiring of the floodlights. Since I have this unexpected opportunity, I ask the Government formally to produce within a month or two at least some considered opinion from the Health and Safety Executive on that new development.
Paragraph 94 of the report continues:
From the consideration of fatigue loading by Pell Frischmann, the HSE was satisfied that the structural integrity of the primary bridge structure was not being adversely affected by fatigue and a considerable fatigue life still remained. Any damage which was occurring was to the railway track supporting structure or to deck plates both of which are capable of being repaired.
In his reply, I want the Minister to make it clear who will be responsible for that work in the short term.
I am not in the habit of criticising individuals on the Floor of the House and I will certainly not criticise Paul Prescott, who is well known to Ministers, for saying so, but he told my hon. Friends the Members for Midlothian and for Cunninghame, North, "If money is available, you had better understand that the Forth bridge is my third or fourth priority. My top priority is the signalling system outside Bearsden and the bridge is rather far down the list". If that is Railtrack's view, given the HSE report, where do the Government think that the bridge should come in the list of priorities?
I will list a few of the HSE's conclusions.

Mr. Wilson: On the question of who is going to pay, will my hon. Friend join me in rejecting the idea that the Forth rail bridge, which has been maintained as railway property for generations, should become a monument to be financed, not by the railway authorities but by some organisation responsible for historic buildings and monuments, which is another idea that has been floated by Railtrack?

Mr. Dalyell: I do not want to be too personal, but my wife is a member of the Ancient Monuments Board and the Royal Fine Art Commission, which will certainly not have the resources. They do think that it is their job to finance out of their limited funds work that could be extremely expensive.
It has to be made clear to prospective purchasers of Railtrack that the organisation has the obligation of spending a great deal of money—we are not talking


peanuts—on the bridge over the next five years. That ought to be made clear in any prospectus. I must tell my hon. Friend the Member for Cunninghame, North that I hope that it will be made very clear that the financial obligation for the Forth bridge should be included in any prospectus put to prospective shareholders.
I do not want to abuse the time of the House, but I must draw the Minister's attention to the following recommendations. Recommendation 99 states:
The condition survey revealed a significant deterioration in the paint coating on the bridge. A more satisfactory protective coating system to the traditional paint needs to be developed and the protection restored as part of a planned maintenance strategy.
Has Railtrack—and Bob Horton in particular—accepted that there will be a planned maintenance strategy such as that envisaged by the HSE?
When the Secretary of State courteously gave way, I raised recommendation 100, so we can take that as read and in Hansard. Recommendation 101 concerns the principal roller bearings. I am told by engineers—I think that the hon. Member for Chorley (Mr. Dover) will bear this out—that the bearings are crucial in the life of the whole structure. The HSE recommendation states:
The principal roller bearings at the north and south portals do not appear to be functioning as intended and there is some evidence of past damage and repair. The structural analysis indicates that this does not at present affect the integrity of the structure. Further consideration needs to be given as to how these bearings are actually functioning and how they may be restored to an acceptable condition. HSE recommends that a system for monitoring the movements of all bearings should be instituted.
Is that going to be Railtrack's responsibility? Some Railtrack personnel have told me that the bearings have not been functioning for some time and so it is a historic obligation that should be taken on using Scottish Office funds. I asked the Scottish Office if it had the money to do the work and it said that it was not in its budget. Who is responsible for the bearings?
Recommendation 102 continues:
Although the knuckle pin bearings at the 'fixed' ends of the suspended spans are not correctly aligned to the structure by modern design, the structural analysis indicates that this does not compromise the structural integrity of the bridge. The 'rocking posts' at the 'free ends' of the suspended spans appear to be capable of functioning but no means of lubrication was observed. Further consideration needs to be given to what action is required to ensure the continued acceptable operation of these bearings.
I do not suggest that it is the business of the Secretary of State to go out with a lubricating can or to be personally responsible for the lubrication of a particular bridge, but it is fair to ask Ministers how that work is to be done and whether they are prepared to ensure that it is.
Recommendation 103 states:
The bearings at the base of the skewbacks appear to be seized. Analysis has demonstrated that this lack of movement has no significance with regard to the structural integrity of the bridge.
But, recommendation 104 continues:
The lubrication system of the bearings on the approach viaducts does not appear to be functioning and further consideration of this aspect is necessary.
I am told by other engineers that, in terms of the long-term life of the bridge, the position and functioning of the bearings along the lines that the builders intended has been somewhat underestimated by the HSE inspectors and that that ought to be considered.
Recommendation 105 states:
Cracks identified in the rail troughs should be repaired in the near future. The integrity of the previous repairs should be investigated. Any repairs and the repositioning of the longitudinal timbers over the transoms should be undertaken as part of a planned maintenance strategy. Similarly the tears in the deck plates need to be repaired.
Again it is the same question: who will finance the repairs? I hope that the Minister will say at 9.30 tonight that the hon. Member for Linlithgow and his colleagues need have no worries that Railtrack is undertaking the total financial responsibility of the HSE report.
In the hours that the Minister has between now and making his closing remarks, I hope that he will take the opportunity to get on to Railtrack, which has been well appraised of the problem, and ask Bob Horton, or whomsoever, what they are prepared to undertake. I think that the House of Commons is entitled to know the future of what is not only a vital link to the north of Scotland but the greatest monument to British, European or world engineering of the 19th century.
I thank hon. Members for their courtesy in hearing me.

Sir David Madel: It is a pleasure to follow the hon. Member for Linlithgow (Mr. Dalyell). Later in my speech I should like to say something about safety on the railways, although not so much in relation to the topics that he mentioned.
Railway privatisation, as has been said by hon. Members, has been the most difficult and complicated privatisation ever undertaken, although it has been one of the smallest. Rail travel affects many people's lives daily, but, in view of the furious political controversy over privatisation, it is bound to be some time before the public can judge whether they think that it has been a success.
The Government have quite understandably drawn attention to the fact that they will save money in the short and long terms, not only because of the sale but because of the declining subsidies that they will have to pay.
As a start, I suggest that the public would strongly support the proposal that the money that is saved should be recycled back into other parts of the transport system. I am in no sense advocating more motorways or the endless widening of existing ones. We have known for some time that there is virtually no new road-building programme planned for London.
The current situation, however, leaves one aspect of transport policy still requiring urgent attention. If the House will excuse me for a few seconds, I shall of course refer to the bypasses that are vitally required round so many of our towns.
Transport Ministers, who have listened to me very patiently over the years, will understand why I shall take this opportunity to make a short, sharp further plea to get started on Dunstable's bypass. I know that it cannot be started overnight, but the sooner we at least start the pre-public inquiry conference and then the public inquiry into that bypass, the sooner morale in the town will be lifted—not least because of the current acute local economic difficulties that are much tied up with our transport system.
I should also like to raise briefly another local matter, which is of direct relevance to Railtrack. I hope that Railtrack, once floated, will want to expand its asset base


by re-opening disused railway lines and generating business and profits from them. We have such a disused line in my constituency, between Dunstable and Luton, with track and rails already there and a powerful local campaign in place to get it re-opened.
Re-opening the line will of course cost a bit of money, and I agree that it cannot be accomplished overnight. I hope, however, that Railtrack will do an early feasibility study on the value of opening that railway so that people in Bedfordshire can know whether it has any plans or desire to make use of that existing infrastructure. I cannot think of a more environmentally friendly way in which to try to solve some of our problems in Bedfordshire than to get this railway line re-opened and used.
As I said at the beginning of my speech, I should like to say something about rail safety and the west coast main line modernisation. There has of course been much talk about how Railtrack will steadily improve its financial performance and build up its profits. There has also been much talk about cost cutting and the potential for cost cutting, which has inevitably led to fears about safety. Those fears must be allayed. In the chapter on work force safety, on page 10, the "Railway Group Safety Plan 1996–97", which was published by Railtrack, states:
Organisations new to the railway also work at the trackside and the management of the arrangements to manage such contracts will be key to sustaining the improvement in trackside safety that has been achieved.
That sentence is self-explanatory, because it refers to new companies in the railway business that will get new contracts to improve and modernise the track. As the companies are obviously very new to the business—otherwise the document would not mention that they are—it is vital that the Health and Safety Executive becomes involved with them at a very early stage to ensure that safety rules are drawn up, which are new to those companies because they have never engaged on railway work before.
A second, equally important paragraph on page 10 refers to work force safety. It states that
organisations should develop their objectives aimed at reducing that risk to as low as reasonably practicable
and refers to other groups of workers who are exposed to risk.
Those organisations obviously must define what the other risks are, but they must also do something more. They must build up a joint management-work force committee that can identify and minimise the risks to safety to the lowest level that is practicably possible.
We all want to benefit from a new system of awarding contracts for railway work and to see new companies getting railway business and, hopefully, taking on more people, but the philosophy must always be value for money plus safety—the two simply must not be separated.
As a Member of Parliament representing a constituency in the south-east of the country, I should like to see the earliest possible start on the Bedfordshire-Euston section of the west coast main line, not only for the benefit of current users but for the benefit of future users who want to get to work in London or to stations down the line.
I have one comment to make on the document produced by Railtrack on the west coast main line modernisation. There is a section on page 33 of the document entitled

"The Core Investment Programme". In relation to the new signalling arrangements, which is the subject of the section, the document states:
Staff from each of the control disciplines would be co-located to reduce costs and optimise flexibility in the event of an incident, allowing the possibility of multi-skilling in the future.
That statement must raise some anxiety among the work force because the statement is—understandably because of new technology—hinting at the possibility of job losses in that part of the industry.
As we know, Railtrack had an extremely unhappy beginning because of the dispute with the signalmen. A wider point to be made in relation to technology is that some, though not all, privatisations have created real public disquiet and because of insensitive remuneration packages for directors and senior staff. The management of Railtrack must take the work force with it and work with the grain if it is successfully to make changes in the industry for the good of everyone.
I have always felt that one of the reasons why the possibility of privatising the Post Office was stalled was that the management simply could not get across to the work force the benefits of privatisation. Railtrack is about to float. It is incumbent on Railtrack management and of vital importance that it really does get across to the work force the benefits of privatisation.
Complicated and difficult though this privatisation has been, it can succeed because investment is at last freed from unnecessary, fiddling Treasury control. At last, we can get an increased volume of investment, which can transform the industry.
Years ago, Rab Butler used to stress to Conservatives the need to practise the patience of politics. We are going to need plenty of patience before the fruits of privatisation become apparent, but become apparent they will.

Mr. David Chidgey: Reflecting on the opening contributions to today's debate, it would be easy to regard the debate as an adversarial contest between a dying Government clinging desperately to their dogma and an Opposition bursting with condemnation but somewhat short on conviction. However, the debate goes far deeper than that and that first impression was surely false.
This debate goes to the very heart of whether Britain is to have an efficient modern transport system to boost our economy into the next century or whether we shall be left with the bare bones of a transport network, fought over by private interests motivated only by their personal and corporate profit.
The future of Railtrack and rail privatisation is vital to our economy and the environment. Incidentally, so far very little has been said about the environment, but I hope that other hon. Members will say something about an element that is so important to our transport system. Strategic investment and the decisions that go with it cannot be made in isolation. We have to consider the whole transport system—rail and road—as one. The various elements cannot be separated from each other when making strategic investment decisions.
If Railtrack is to become a linchpin in a revitalised transport system, we should be considering a series of key objectives and assessing how privatisation would or


would not meet them. We need to create an investment culture to modernise, develop and expand the railways within an integrated transport system. Passenger and freight—especially freight-patronage has to be greatly increased to take up the spare capacity on the railways, which is running at about 50 per cent.
The railways need new customers, attracted by fast, efficient, frequent and, above all, cheap services. We need a modern and efficient rail system that delivers good value for money to the taxpayer. Above all, customers for the new modern railway must be able to use the system in the certain knowledge that it is maintained and operated to the highest safety standards. I believe that we have to set the proposals for the privatisation of Railtrack in the context of achieving those aims and examine the impact of privatisation so far. Perhaps we can forecast what is likely to happen with the privatisation of Railtrack.
Franchise after franchise has been let with no requirement for a commitment to invest in desperately needed rolling stock. There are one or two exceptions, which the Minister cited, but the vast majority of franchises have been let with little or no requirement to invest in rolling stock. Rail privatisation seems to have been driven by a sort of manic belief that competition and market forces are the ultimate goal if one is trying to provide an efficient railway system, yet a combination of the Government's desperate need to raise cash as quickly as possible and the Treasury's insistence that franchises should be limited to the minimum period that the Government can get away with has stifled investment in our railway system and, in fact, lost the very benefits that could have been gained from a partnership between the private and public sectors.
I shall cite one example. Last week, it was announced that the Network SouthCentral franchise has been let. As many hon. Members know, that part of the system has some of the oldest rolling stock in the country still trundling around. That rolling stock still has some of the notoriously dangerous slam doors, which have been the subject of so much condemnation by the Health and Safety Executive.
The franchise winners are not committed to invest a penny in new rolling stock. That is hardly surprising, because their franchise runs for only seven years. How can they be expected to invest substantially in new rolling stock, which has a life of at least 30 years, when, after seven years, they could lose out and see their investment disappear?
To date, the major impact of rail privatisation seems to have been to squeeze the life out of the rail industry. Not one new rail locomotive has been ordered in the United Kingdom for more than 900 days. The UK rail industry is on its knees and in danger of going into terminal decline.
Franchises should be renegotiated and not just allowed to run out, as the Opposition believe. I know that many rail franchise winners are eager to renegotiate and may already be talking to the Secretary of State about the possibilities that would provide the opportunity to invest in new rolling stock and improve rail services. One of the first jobs of a new Government should be to reconsider the franchises to update, renegotiate and widen them and make them attractive to the investor and the user.
Figures on investment in Railtrack are bandied about in all directions and plucked out of various pockets of air, but they rarely add up. The Rail Regulator's report to the

Select Committee on Transport stated that, in 1994–95, Railtrack spent £150 million less than the average £483 million required in its asset management plan to maintain the rail network. That is probably an accurate statement. In its 10-year plan, Railtrack proposed investing less than Britain Rail had planned. Railtrack proposed £1.03 billion a year compared with British Rail's £1.11 billion a year. That seems to make sense to me. Of course—

The Minister for Railways and Roads (Mr. John Watts): rose—

Mr. Chidgey: I thought that that might drag the Minister to his feet.

Mr. Watts: The hon. Gentleman is citing past figures for investment by British Rail, but will he acknowledge that he is talking about investment in infrastructure and rolling stock? In previous years, there was heavy investment—£4 billion over 10 years—for 4,000 new pieces of rolling stock. Therefore, the hon. Gentleman is not comparing like with like, even if the total figures that he is citing are correct.

Mr. Chidgey: I thank the Minister for that comment and I shall return to it later when comparing the subsidy paid by the taxpayer to British Rail in the past with the subsidy that the taxpayer is now expected to contribute under the privatised system. Perhaps the figures taken together will give us a greater insight into the overall cost of our railways.

Mr. Peter Luff: Do the figures that the hon. Gentleman gave for British Rail's investment in infrastructure and rolling stock include the cost of works associated with the channel tunnel and the upgrading of the line to the tunnel?

Mr. Chidgey: The figures that I am using are those for maintenance and do not include investment in the channel tunnel rail link.
Setting aside the lack of investment, what hope is there that a privatised Railtrack will increase patronage? What steps will be taken under the new system to attract more passengers, and especially more freight, on to the railways which, as I said, are running at only 50 per cent. capacity? With the Rail Regulator's guidelines set firmly to maximise competition, there seem to be very few incentives to increase patronage. In fact, Railtrack seems perversely to be bent on driving away custom.
Railtrack's charges are so high that train operators are now moving rail vehicles and even locomotive fuel by road because it is cheaper to do so. The marginal costs of adding one extra coach to a train are £170,000, as I think the shadow Secretary of State for Transport said. The operator could provide a fleet of buses to move passengers around the country for less than that.
Railtrack's approach to attracting freight customers beggars belief: it is widely reported that Railtrack is erecting barriers to companies that would prefer to switch to rail. Developers hoping to build rail terminals and sidings accuse Railtrack of exploiting its monopoly and demanding excess sums for links with the rail network. Complaints are rife that Railtrack demands fat


consultancy fees up front to carry out freight link feasibility studies instead of sharing the initial risk and recouping its fees if the project is successful; that is the standard way of operating in business and in every other sector of industry of which I am aware.
I emphasise my point by referring to an article that appeared in the Financial Times on 14 February this year. Railtrack was accused of demanding excess wayleave payments from developers who needed to build roads and bridges over railway land, even though it was not involved in those projects. A classic case is the £380 million freight terminal that PowerGen is building at Hams Hall near Birmingham. Before allowing PowerGen to build a road bridge over the track, Railtrack demanded a half share in the full profit from the £380 million development in which it was not involved and had not invested. That is the ransom that it demanded for granting wayleave over its land.
Instead of nurturing a culture aimed at creating and increasing business, developers are faced with monopolistic exploitation that will only worsen under the current privatisation programme. What hope can we have that a privatised Railtrack will provide a modern, efficient rail system that delivers good value for money to the taxpayer? I think that there is little hope of that.
I return to expenditure on the railways. I examined the Government's transport report while preparing my speech, and compared the figures in that report with those provided by people with knowledge of British Rail's performance. I found that, according to British Rail's figures, the taxpayer provided some £930 million in 1993–94 to support passenger services and £105 million to support passenger transport executives—a total of about £1 billion.
In 1994–95, under the Government's new regime, the Office of Passenger Rail Franchising—Opraf—support grants had risen to £1.74 billion, together with PTE support of another £340 million. Public support for the railways rose to £2 billion. Government expenditure plans show that, by 1995–96, Opraf will provide a support grant of £1.7 billion to which must be added the PTE support—that figure has not been produced, but one could reasonably expect it to be about £300 million. Therefore, public support for the railways would again be around £2 billion. It is likely to be the same in 1996–97. As a result of privatisation policy, the taxpayer's support for railways has doubled to £2 billion since 1994–95 and will continue to increase at a rate of £1.5 billion a year into the next century.
While the new rail companies remained in public hands, there was no great impact on public expenditure because the profits earned by the train operating companies, the ROSCOs—the rolling stock companies—and Railtrack were recycled to the Treasury. However, as the railway is fragmented and sold, the profits—paid for with taxpayer subsidies—will go not into vital investment in the railways but into the pockets of directors and shareholders, with a minimal commitment to expanding services and increasing passenger numbers and freight.
So we come to the flotation of Railtrack: the ultimate giveaway of public property, garnished with profits rightfully due to the taxpayer. We are told that Railtrack shares are likely to fetch some £1.5 billion on the stock

market. Yet the net book value—never mind the replacement cost—is calculated in the prospectus at some £4.3 billion.
It is enlightening to see how financial advisers are marketing the share sales. I am pleased that the Minister is still in the Chamber, as he may not have had the opportunity to receive this sort of feedback. I refer him to one so-called "share shop" and its pamphlet which one can buy for an annual subscription of £40—I hasten to add that I did not buy it; it was given to me as an example. It is interesting to see how it is marketing the Railtrack shares. The pamphlet states:
Railtrack is essentially a property company and the land that Railtrack will own could be regarded as one of the most valuable pieces of real estate in the United Kingdom".
It goes on to describe how the track passes through
valuable commercial and industrial sites all over the UK".
It refers to those as being ripe for exploitation—they are not my words, but those of the salesmen—with retail developments at main line stations competing with major department stores up and down the country. The pamphlet then describes how stations can have
a captive audience of passengers who are all potential customers".
It refers to the passengers who either arrive too early and have time to spare or, better still, who
arrive at the last minute, missing their train, and have possibly an hour or so to wait until their next train.
This waiting time is valuable selling time for retailers and food providers".
So now we know: the aim is not to run a fast, frequent and efficient railway; it is to capture passengers at railway stations that have been redeveloped into shopping centres. That is the hidden agenda. It is no wonder the article is entitled "Railtrack—could this be the end of the privatisation gravy train?".
It may be good business for Railtrack to act as a property developer, but it is emphatically poor value for taxpayers, who have the right to expect that the billions of pounds that they pay in subsidy will be invested in a modern, busy railway. Taxpayers have the right to use a railway system that is maintained and operated to the highest safety standards. Under Railtrack, there has been a catalogue of failures to maintain safety standards which experts forecast will only worsen if it is privatised.

Mr. Tredinnick: rose—

Mr. Chidgey: I am about to conclude. The hon. Gentleman will have a chance to speak later in the debate.
The Health and Safety Executive report on Railtrack's formal management systems concluded that the weaknesses in those systems could eat away at safety margins and increase the risk of harm.

Mr. Tredinnick: Will the hon. Gentleman give way?

Mr. Chidgey: Madam Deputy Speaker, I will not give way; I shall finish my speech. I am sure that, in time, the hon. Gentleman will have an opportunity to contribute.

Mr. Tredinnick: On a point of order, Madam Deputy Speaker. I seek your guidance. In a debate in which all hon. Members have given way generously, is it not a breach of normal behaviour in the House for the hon.


Gentleman to refuse to give way, despite the facts that there are no restrictions on the debate and he has ample time in which to do so?

Madam Deputy Speaker (Dame Janet Fookes): The rule is very clear and I expected the hon. Member for Bosworth to know it: it is entirely at the discretion of the hon. Member who has the Floor to decide whether to give way.

Mr. Chidgey: It is clear that overall responsibility for safety has become confused and that a culture of blame is developing. When something goes wrong, it is a case of, "It's not my fault, it is someone else's." A classic example was the recent Stafford rail crash.
Railtrack's immediate response was to claim that the accident had nothing to do with it. In its haste, it wrongly advised one family that a relative had been killed.
I recently questioned the Minister about a derailment at Euston station last December which paralysed a major part of the network. It has emerged that Railtrack ignored three earlier warnings from its contractors about the condition of the track. Under the old British Rail regime—that old monument, as we were told earlier—the manager responsible for such dereliction would have been sacked on the spot. Railtrack did nothing, and the Minister has yet to tell me why. Is it any wonder that more than 80 per cent. of Railtrack's middle managers are opposed to the sale of Railtrack, stating as one of their major reasons the fact that safety standards are declining as commercial pressures start to drive the business?
In terms of investment, attracting new customers with fast, efficient and frequent services, providing modern, efficient rail systems delivering good value for money and providing a well-maintained and, above all, safe railway, Railtrack is failing, and it will fail faster under privatisation.
If we are to combat the growing congestion on our roads and the increasing pollution of our environment, we have to transport more people and freight by rail. The railways have a great unused capacity. Investment must be a priority to allow faster, more frequent and more convenient rail travel. The choice between investing in major new roads and investing in railways is vital to our economy and our environment. It is not acceptable to allow a private company to take such decisions solely in the interests of its shareholders.
The Liberal Democrats are prepared to pledge that, in the next Government, we would issue fresh guidelines to the Rail Regulator. He would no longer be required to promote competition; instead, he would be obliged to set ambitious targets for maximising patronage, to cap the dividends of Railtrack and to prevent it from exploiting its property assets at the expense of the taxpayer. Development profits would be used to invest in the railway rather than to benefit the shareholders and Railtrack would be forced to use its asset base as a financial instrument to raise capital to reinvest in the railway. Perhaps most significantly in terms of the operation of the railway, the Rail Regulator would have guidelines that forced Railtrack to charge freight operators only the marginal wear-and-tear costs of access to make sure that we brought freight back to the railways.
Our vision offers simplicity—fewer lawyers, fewer accountants, more passengers and less pollution—a busy, expanding railway giving value for money to the taxpayer.

Mr. Gary Waller: The public are fed up with the old arguments about privatisation. They deserve a more intelligent debate in which it is not always claimed that every conceivable human activity must be run in the private sector. At the same time, however, the Labour party must learn that it need not inevitably resist it to the death, as it invariably has done and is doing today.
I start from the position that commercial activities are better run by free enterprise than by Ministers and civil servants. That is unarguable, but even after 17 years and many benefits arising from previous privatisations, the Government cannot assume that the public will always see an overwhelming case for the private sector to run such activities. In each instance, the case must be made on its merits and I believe that in this case the merits are very great indeed.
What makes privatisation successful? What makes it work more effectively? In a word, it is competition. That is why the Government have sought to introduce genuine competition where it does not exist or exists only to a limited extent. Where competition is absent or very limited, it is necessary to substitute a strict regulatory regime. However, regulation has its limits. The more successful a company becomes at running its business, the more a regulator may find it necessary to intervene. Thus, the share price of a private enterprise may be affected more by investors' perception of a regulator's determination to exercise his powers than by almost any other factor.
Rail is a natural candidate for privatisation because it offers considerable opportunities for competition. The method of rail privatisation adopted by the Government certainly involves greater risks—especially political risks—than a straightforward single privatisation of the industry, but it also offers much greater opportunities for the future.
The franchise method means that many potential operators are competing for the right to run services over a period of years. If they are successful, they will operate a commercial enterprise with considerable potential to compete effectively with other domestic modes of travel, particularly road and air. As competition will exist when the franchises are awarded and then throughout the term of each franchise, I believe that it will not be necessary for the Rail Regulator to exercise his responsibilities with a heavy hand. That is why the operation of rail services falls naturally into the private sector. We still have to prove that case. Far from having difficulty in doing so, I welcome any opportunity to argue from that position.
Whatever criticisms may have been made of British Rail in the past, the fault lay mainly with the system under which it operated. Rigorous control of the railways by the Treasury has produced disastrous results for British Rail over many years. The franchising director, Roger Salmon, has explained that whereas capital expenditure often demands 30 and 40-year time horizons, the British Railways Board could often look forward only a few months. Capital expenditure had to be controlled until quite late in the year in case revenue fell short of what had been anticipated. If capital expenditure is managed in such a way, it becomes impossible to plan effectively and sensibly. I maintain that, ultimately, the success of privatisation can be properly assessed only by rail customers, and in those terms some of the benefits that


ensue from the ability to plan on a longer-term basis are already apparent. I refer in particular to the guarantees that have been given about rail fares over the next seven years and about service levels, both of which are entirely new concepts. In relation to those factors, to access charges and to extending competition, the franchising director and the Rail Regulator can use their powers to benefit passengers in a way that Ministers never could or would.
The variety of train operating companies inevitably means that there will be variations in management style and practice. To some extent that will reflect the differences between the businesses that they run, but I believe that there will be opportunities to emulate best practice in a way that could not be secured in a monolithic structure.
Train operating companies will be able to plan ahead in a way that rail managers never could because of the confidence that there will be a steady flow of investment by Railtrack in renewal, maintenance and new capital investment. Those in British Rail who ran the trains could never be confident that their colleagues who provided the tracks on which the trains ran would be able to deliver. It was not that they did not want to do so, but it was possible that they might not.
The need to plan spending on an annual basis in the public sector meant that projects were subject to frequent interruptions. British Rail could not take advantage of supplier discounts and contractors had little incentive to invest in the most modern equipment. I understand that one project cost double the initial estimate because of frequent interruptions to work when annual funds were exhausted.
The only appropriate way to measure the success of rail privatisation is via customer satisfaction, but in time I am sure that there will be a repetition of the benefits to the taxpayer and the customer which have characterised previous privatisations.
In 1979, the borrowings and losses of state-owned industries were costed at some £3 billion a year. A decade later, newly privatised enterprises were making a contribution in terms of tax paid to the Treasury of some £2 billion. To anyone who claimed that we were selling off the family silver, I would respond that it was a strange analogy to use if having it on our shelves cost us good money whereas its use by others produced a handsome return.

Mr. Tredinnick: My hon. Friend will recall that the hon. Member for Eastleigh (Mr. Chidgey), who spoke on behalf of the Liberal Democrats and who is not in his place at the moment, argued against the utilisation of land at stations and against the improvement of facilities. Does my hon. Friend agree that it is better to use those assets effectively and that it is in the public interest to do so, although it is obviously against Liberal policy?

Mr. Waller: I entirely agree. There has been a desire in the city of Bradford for many years to provide a shopping centre at Forster square station. I believe that that would be easier to do in future.

Mr. Wilson: On a point of order, Madam Deputy Speaker. In fairness to the hon. Member for Eastleigh

(Mr. Chidgey), I want to point out that he left the Chamber only to give his speaking notes to Hansard. That was an extremely cheap point by a rather expensive hon. Member.

Mr. Tredinnick: I said that the hon. Member for Eastleigh was not in his place, which was correct. I did not say that he had left the Chamber. He was sitting at the other end of the Bench.

Mr. Waller: I believe that it will be easier in future to provide a shopping mall of the sort to which I referred, which has taken so long to develop in Bradford. Far from regretting that land will be developed, I think that is to be welcomed. The assets in question have been underdeveloped in the past. British Rail often wanted to develop them but was unable to do so because of limitations on its activities. The hotels that British Rail used to own remained underdeveloped compared with hotels in the private sector until the time that they were sold, which preceded this privatisation exercise. The sale of those hotels has been good for their customers and for taxpayers, who previously had to bear the hotels' losses incurred but who subsequently saw some benefit.
State ownership limits an industry's ability to look elsewhere for loans and investment. When a state-owned enterprise borrows money, the Government underwrite the loans, which make them indistinguishable from all other forms of public sector borrowing. Demands of enterprises such as the railways have often been fairly low on the list of priorities. Any Government first have a responsibility to the economy as a whole. As there are times when the needs of individual state enterprises must inevitably take a back seat to macroeconomic requirements, politicians often have to curtail the ability of state enterprises to borrow. Railways, like other industries, have never been able to achieve their potential under state control.
A recent editorial in the Financial Times stated:
If the railways were working well, there would be an argument for leaving them alone. As it is, even with some of the highest fares in Europe, they are under-invested; passengers are still too often made to feel as though they are an encumbrance to the running of the railway, rather than the reason for it… Privatisation has already raised investment levels and transformed management in other industries… If the Government gets it right, its plan presents the best prospect of providing Britain with the attractive and well-run railway it needs.
I note that The Guardian has also acknowledged the potential in privatisation and that one should not discount that potential, which Labour Members are again doing tonight.
Other countries are not immune to the imperatives that drive privatisation forward in this country. Britain's record of investment in a nationalised rail sector is often unfairly compared with that of Germany and France. If the comparison is related to investment per mile of route, Britain by no means does badly.
The true cost of state ownership is now more fully appreciated in other countries, especially as losses increase. My right hon. Friend the Secretary of State for Transport referred to the losses already accrued in France. Suggestions that the French Government intended to make a significant cut in the scale of their subsidy to the railways as a possible prelude to privatisation were sufficient last autumn to drive mollycoddled rail workers to strike action. France is watching closely what happens


in Britain, because France appreciates that it cannot ignore the advantages that we are now grasping. The German Government have adopted a 10-year programme to transfer a major part of the rail network to the private sector, and many other countries are following the logic of that process. We are in the forefront of the process, but we are far from alone—other countries are waiting to learn from our success. Everywhere, competition is seen as the way forward.
Railtrack has announced that in the 10 years after privatisation it will spend more than £1 billion a year on maintenance and renewal of the rail network. When the sale of Railtrack is complete, it will have access to new sources of finance, enabling it to proceed with major projects. In the last 10 years, rail fares have risen more than 22 per cent. above inflation. I do not think that the customer has had a good deal for the money that he or she has spent. In the new privatised railways, key commuter and leisure fares will be pegged to the rate of inflation for the next three years, and they will be frozen below inflation for four years thereafter. Through tickets and railcards will still be available. Many of the scare stories that have been bandied about are simply not true.
In the past three weeks, the InterCity East Coast franchise has been awarded to Great Northern Railways, a subsidiary of Sea Containers. Judging by the plans announced by GNR, that looks like a good deal for users of the east coast main line, including myself. The outcome must be judged by deeds, not words. It is certainly good news for the taxpayer that GNR plans to change InterCity East Coast to a business that no longer relies on public money. Passengers—certainly from the north of England—will primarily be concerned with assessing the service that they receive.
I welcome the commitment to an improved passengers charter and upgraded facilities—especially at stations, with particular emphasis on passenger security measures and improved access for disabled passengers. It should prove possible to improve existing scheduled travelling times on Sunday, bearing in mind that InterCity East Coast has regularly allowed at least an extra 20 minutes on scheduled arrival times to allow for possible delays, usually enabling the claim to be made that the train has arrived up to 20 minutes ahead of time.
I hope that Great Northern Railways, in considering new business opportunities, will talk to Railtrack about the possibility of operating at least one London-bound train a day from Skipton, because many people believe that there is considerable potential for additional patronage from stations in the Aire valley. It is a great advantage that the line is already electrified, but I understand that additional work must be done to accommodate InterCity rolling stock—such as lengthening platforms and upgrading overhead power lines. I am afraid that they are the wrong kind of wires.
Many of the trains operated on the Airedale line and all those running on the Wharfedale line in my constituency are supported by West Yorkshire passenger transport executive under section 20 agreements. I welcome the Government's intention, stated in their response to the Transport Select Committee's report on railway finances, to use the standard spending assessment mechanism to provide support for PTE-secured rail services, which will enable them to deliver sufficient funding to maintain existing services in future years. Bearing in mind that, 15 years ago, the Wharfedale line in particular was

threatened with extinction, it is welcome that local rail travellers can now look forward to a much more encouraging future.
The future for regular users of the Airedale and Wharfedale ultimately depends on the acquisition of new trains. We need to make up for a grievously shortsighted approach by the Treasury which, following electrification of the track infrastructure, was unwilling to give guarantees to the banks that were putting up the finance for new trains to be leased, and which were deterred by a number of uncertainties at the time—including the future of passenger transport authorities. The acquisition of second-hand trains that previously operated on the London-Tilbury-Southend line was the best deal that could be done in the circumstances, but slam-door stock—which first came into use in the 1950s—is a hopelessly unsatisfactory alternative to the acquisition of new trains. It is inadequate in safety terms and it comes nowhere near the standards that we should rightly expect on behalf of disabled people. For instance, it is impossible to get wheelchairs into those trains. I know that my right hon. Friend the Member for Kettering (Mr. Freeman), then the responsible Minister, did his best to tie up a deal, but unfortunately he was not successful.
Despite money being spent on refurbishing the old LTS trains, serious technical failures occurred last November—fortunately without injury to passengers. The need to take all the electric rolling stock out of use and for it to go back to ABB at Crewe has resulted in an inadequate service for rail users in recent weeks. That has been a severe setback because patronage had increased following electrification of the line.
The problems have given a new impetus to talks that had already begun to discover whether an order could be submitted to bring new trains to those lines by around 1998. Some of the uncertainties that prevented the deal from being concluded some time ago, including the question whether the PTEs had a future, have now been resolved. Other matters, such as the length of a franchise for the operation of trains on the lines, have yet to be determined. I believe that a 15-year franchise term would provide a better prospect of securing a satisfactory leasing arrangement. As in the past, the best possible deal could be done by tying the acquisition of new trains to others being ordered elsewhere so that the benefits arising from economies of scale can be grasped.
I hope that it may be possible for an order to be submitted this year, enabling the new trains to be delivered in 1998. Unfortunately, recent setbacks may have led to a loss of confidence by some passengers and everything possible needs to be done to reassure them. For commuters, students and shoppers travelling to Leeds and Bradford, the train should be a convenient, comfortable and environmentally friendly alternative to the car. We must do everything we can to make that so. I agree with the hon. Member for Eastleigh (Mr. Chidgey), who referred to the importance of the environment. If we can encourage the use of trains, it can do nothing but good for the environment. I know that my hon. Friend the Minister for Railways and Roads is aware of my local situation and I hope that we can rely on his support in achieving our objectives.
Privatisation is designed to halt and reverse the decline in railway use. As has been pointed out already in the debate, £54 billion has been invested since 1948 but, as my right hon. Friend the Secretary of State said in his


speech, the share of journeys by rail has fallen from 17 per cent. in 1953 to just 5 per cent. now. That has been bad for everybody. Privatisation offers a great opportunity for change. We already have some encouraging signs that many individuals and enterprises in the private sector want an opportunity to show that they can do better. We owe it to rail passengers, to the environment, to the companies and to the future of this country, which depends greatly on a good transport infrastructure, to give privatisation every encouragement.

Ms Glenda Jackson: The Secretary of State attempted to convince the House—with a marked lack of success—that the Government's plans for the privatisation of our railways and the creation of Railtrack were already an unqualified success. That has not been the experience of my constituents, certainly from the beginning of this year. [Interruption.]
I seem to be causing some concern to the hon. Member for Castle Point (Dr. Spink). If he would like me to give way, I would be happy so to do. He is checking in the list of Members' interests, and I have little doubt that he is about to accuse me of not declaring an interest as a Member sponsored by the rail drivers union, the Association of Locomotive Engineers and Firemen or ASLEF.
The situation has changed since the House has reconvened. I, in common with all my right hon. and hon. Friends, am no longer sponsored by trade unions. Such sponsorship as the trade union movement continues to devote and dedicate to the Labour party is via the constituency parties and not to individual Members of Parliament. I hope that I have set the hon. Gentleman's mind at rest. [Interruption.] I clearly have not, so I will give way.

Dr. Spink: I was not going to make any accusation about the hon. Lady. I am delighted that she has explained the situation, and I am delighted that she no longer speaks for that vested interest. Perhaps she will join Conservative Members in speaking for the public interest and the passengers.

Ms Jackson: Would that Conservative Members spoke sufficiently frequently for the vested interests of their constituents and the public. If Conservative Members spoke for those interests, I have little doubt that they would join us in the Lobby tonight and vote against the flotation of Railtrack.
The point that I was attempting to make leads directly from the contribution by the hon. Member for Castle Point. The privatisation of our railways and, indeed, the formation of Railtrack have not been in the interests of my constituents, especially those living in two roads in the Cricklewood area. Since the beginning of this year, necessary work—I have no doubt that the work is necessary—on the tracks that run alongside those roads has been causing problems.
I have received a letter from one of my constituents, on behalf of the Fordwych Residents' Association, which states:

I write … to advise you of the very considerable discomfort, inconvenience and apprehension of danger to their homes and properties experienced by many of the residents in this area as a consequence of the very much increased vibration from the railway track which runs parallel
to those roads. He continues:
people … have lived for many years adjacent to the railway line and have become inured and habituated to the normal level of traffic"—
but he says that they regarded the current level of vibration to be abnormal. That letter was dated 14 March.
A response to that letter, dated 1 April, came from the infrastructure services manager of Railtrack Midlands to my constituent. The reply states:
Your fear that vibration from the railway may lead to long term structural damage to your house must be denied.
There is no reason why my constituent must deny the experience that he, his family and neighbours are living through at the moment, but the most important paragraph of the letter is the last one. The letter is signed by Mr. K. B. Humphrey and states:
The above may not be what you want to hear but I am afraid Railtrack do operate their railway with the benefit of statutory authority and in the absence of proof of negligence they are not liable to adjoining landowners for noise, vibration or otherwise.
Many Conservative Members, in our debates on the channel tunnel rail link, have voiced the concerns of their constituents about the possible vibration and noise that may be contingent upon the construction of that high-speed line. The letter is a fairly clear proof that Railtrack is not putting the customer first. We are told that that is the basic overriding priority of any privatised company—the Secretary of State said it today. The phrase he used was that the customer is king. Clearly Railtrack does not regard its customers as king.
For me, there is another cause for concern in the exchange of correspondence on that issue, and I am sure that all hon. Members would share that concern. There has been much correspondence between myself and my constituents, and between Railtrack and myself on behalf of my constituents, since the beginning of this year. On 12 April, I received a letter from Railtrack East Anglia, from Miss Sandra Jones, the public affairs manager. Her letter states:
The line in question is in Railtrack's Midland zone. I have forwarded your letter for them to deal with. To speed up these matters in the future"—
clearly Railtrack believes that such difficulties will not abate—
would you be pleased to mark on a map which railway lines in your constituency are ours and which belong to other Railtrack zones?
I find it bewildering that Railtrack does not know what it is supposed to be in charge of—it seems not to know which are its lines, where they are and what responsibilities it has.
We have heard about the overall benefits that must inevitably arise for the travelling public from the Government's privatisation plans. The hon. Member for Keighley (Mr. Waller) talked about closed circuit television, which has been a proven success in reducing crime, whenever the Government have managed to find the funding to assist local authorities, for example, to install it. The automatic presumption, indeed assumption, that privatisation will bring about many necessary


benefits—over the past 17 years, successive Conservative Governments have markedly failed to consider them—is not realistic.
I visited Edmonton Green earlier this week. There, the local Labour-controlled authority, Enfield council, had been in consultation with the West Anglia and Great Northern railway to install closed circuit televisions in the four stations in the area. I should say that in one of the stations, Bushill Park, CCTV has already been installed. There were three other stations, however, where the Labour-controlled local authority and the railway company were wishing to install CCTV. These were Edmonton Green, Silver Street and Angel Road.
Only on Tuesday of this week, I believe, the West Anglia and Great Northern railway had to put the scheme on hold, due to uncertainty about its future after privatisation.

Dr. Ian Twinn: It was kind of the hon. Lady to announce that she had been to my constituency, although she did not have the grace to say beforehand that she was going to do so. I am glad that she has acknowledged that it was Tory action that led to the installation of television at Bushill Park station.
Do not the hon. Lady's remarks confirm that we need to ensure that British Rail is in the private sector, so that there is freedom to invest and so that uncertainty can be removed? The hon. Lady is suggesting that there will be further Treasury cuts and stop-starts in providing funding for BR under her scheme, which means that my constituents would be even more disadvantaged if she were ever to be in power.

Ms Jackson: I cannot think of a greater disadvantage for any constituent in any part of the country than to be represented by a Conservative Member. If they have failed consistently for 17 years to bring basic improvements into the railway system, such as safety—[Interruption.] Conservative Members have voted consistently for reductions in services generally.
In the railway industry, over the past 33 months during which the Government have been introducing privatisation, there have been job losses for 24,872 people, at a cost to the taxpayer—to Conservative Members' taxpayers—of about £500,000 a day in redundancy payments. Yet Conservative Members have the audacity and the temerity to attempt to convince the House and the country generally that the Government's policy of privatising the railways has brought benefits to the taxpayer.
As my hon. Friend the Member for Birmingham, Ladywood (Ms Short), who speaks from the Opposition Front Bench on transport matters, had occasion to say this afternoon, the actual costs to the taxpayer of the Government's attempt to privatise the railways, and the flotation of Railtrack, is approaching £2.6 billion. Not one penny piece of that sum has gone into improving track and signalling. None of that sum has been used to install CCTV in the three remaining stations in the constituency of the hon. Member for Edmonton (Dr. Twinn). Services have not been improved.
Constant and consistent unmanning seems to be the first step that every franchise operator takes. When a franchise has been awarded, unmanning will do nothing to attract people on to the railways. As the hon. Member

for Keighley said, it is virtually impossible for people with disabilities to use our railways, as they would undoubtedly wish to do, if stations are unmanned. It is equally highly unlikely that women will consider travelling late at night on our railways if stations are unmanned and the only other person on the train is probably the driver. The dangers are too well reported for that to be a possibility.
Will the Government's policy attract people from their cars on to the railways? My hon. Friend the Member for Lady wood stressed how grossly unbalanced is the present structure for those freight operators who would like to move freight from the roads on to the railways. There is nothing in the Government's privatisation plans or in the flotation of Railtrack that will balance the current basic inequity. Yet we must acknowledge that the way forward, both economically and environmentally, is to attract greater passenger use of our railway system, and certainly greater freight movements by rail.
Privatisation and the flotation of Railtrack, far from expanding the use of railways and improving the presently integrated system, will lead to the break—up of the system. It is nonsense for the Government to argue that the £2.6 billion that the taxpayer has already spent on a benighted policy will improve investment in our railways.
Railtrack has announced, I understand, after the publication of its prospectus, that it perceives spending £10 billion over the next 10 years as investment in our railway infrastructure. I believe that it was three years ago that Mr. Horton trumpeted with some pride that Railtrack intended to spend £800 million over the next 10 years on the west coast main line alone. That £8 billion would, over the 10 years to which he referred, have brought the west coast main line to the level at which it stood in 1973. That amount of investment would have produced a west coast main line that was 30 years out of date.
Apparently the magic door that will open to the treasuries of the world after Railtrack is privatised will produce for the entire network—not one line—only £10 billion over the next 10 years. There are already massive lengths of track along which trains must run slowly. There are speed restrictions because the lines have not been maintained to enable trains to run at the speeds of which they are capable.
We have heard much about the possibility of new rolling stock. If memory serves me correctly, Network SouthCentral, the most recent franchised line, stated categorically that it had no plans to provide new rolling stock on its lines. Network SouthCentral has 60 per cent. of the old slam-door trains. At the end of three years, the majority of its rolling stock will be 50 years out of date.
Network SouthCentral acknowledges that, over the next three years, it intends to invest £10 million in the line. That is £3.3 million a year. That is entirely inadequate, as anyone who knows anything about railways would agree.
There is no possibility, as we have seen ever since the Government introduced privatisation, 0that their proposals will create a railway fit for the 21st century and fit for the people. The only privatisation that our railway needs after 17 years of less than benign neglect by successive Conservative Governments is, as the Labour party has consistently argued, a public-private partnership. That is not, as the Government clearly wish, to wash our hands of the whole affair and push the railway system into the private sector.


I believe that it was the Secretary of State who said this afternoon, in attempting to rubbish—with no success whatever—my hon. Friend's commitment that the Rail Regulator would have infinitely more powers, that he had read in The Independent that the Labour party had argued for dispensing with the regulator in the gas industry. I do not remember the newspaper in which it appeared, but there was a report that the Government intended to abolish the Department of Transport, so one either believes what the newspapers say or one does not, and the Secretary of State was somewhat selective.
By their marked failure to create a properly integrated public transport system for this country, with the railways as the central pillar of a properly integrated public transport system, the Government have done nothing but unmitigated damage. Morale of those dedicated people who have worked all their lives in the railway industry, and who would wish to see out the rest of their working lives in the railway industry, has never been lower.
If Conservative Members really are concerned with the vested interests of their constituents, they should know that the electorate and the nation as a whole have consistently argued against rail privatisation. Every opinion poll has shown that more than 69 per cent. of people in this country are totally opposed to it, and I have little doubt that they are totally opposed to the flotation of Railtrack, particularly when it is their money that is being given as sweeteners to people who will take it out of the railway system and put it into private pockets.
I strongly urge Conservative Members to consider voting with Labour Members tonight. Perhaps they will do so out of self-interest, because one of the most recent opinion polls on the privatisation of the railways highlighted the fact that one in five people who voted for a Conservative Member of Parliament at the previous election stated categorically that they would seriously reconsider that decision on the single issue of rail privatisation.
As the South-East Staffordshire by-election showed only last Thursday, there is virtually no issue that the people of this country believe a Conservative Government could do anything to improve, and in the main they regard the problems of this country, quite rightly, as the exclusive prerogative of an incompetent and, as they say, arrogant and uncaring Government.
Here is an opportunity for Conservative Members to refute that argument, although that it is virtually impossible now, by arguing for once for the interests of the nation and their constituents by voting against the privatisation of Railtrack.

Mr. Den Dover: The key issue before us is whether it is better to take the rail system forward in privatised hands or whether it should remain nationalised. After 50 years of nationalisation, we have seen a lack of investment, a reduction in safety standards and no way forward.
I challenged the hon. Member for Birmingham, Ladywood (Ms Short), the shadow Secretary of State for Transport, to say how she should increase passenger movements and the carriage of freight. She was unable to

say, other than by investment. My right hon. Friend the Secretary of State challenged her on where that investment would come from. The answer was that it would have to come from taxpayers, and that it would cost an enormous amount, increasing taxation, borrowing, interest rates, inflation—the old socialist dogma, which, as we have seen, has failed over so many decades.
We have this evening a chance to break out and ensure that the management of Railtrack continues to provide a much better system, investing where people want them to invest and improving the infrastructure. I was surprised by the hon. Member for Eastleigh (Mr. Chidgey)—a civil engineer like me—who seemed to be opposed to the investment in stations and land. Surely that is where Railtrack's assets will increase enormously, to the benefit of shareholders who will buy into Railtrack in the coming months.
We want better facilities at our stations. We want the travelling public to be better catered for. We want facilities that are more in line with our European competitors, because having served on the Select Committee that considered the channel tunnel rail link, I know only too well that the high-speed rail system on the French side is much better than any system that exists over here, unless Railtrack is privatised and improves facilities throughout the country.
The Opposition motion calls for
higher levels of rail investment, improved services and the best possible return on taxpayers' money.
We shall get that through privatisation. Railtrack's plans have already been announced. It will spend billions of pounds over the next 10 years, and will have to show that to its shareholders in terms of improvements to the whole rail infrastructure. The improved services will come from the rail operating companies. I am delighted that franchises have already been awarded for quite a large percentage of the rail system, and that percentage will improve and become more than 50 per cent. in the not too distant future.
The best possible return on taxpayers' money will be achieved by privatisation, and the taxpayer will benefit by almost £2 billion. Instead of writing off enormous sums by way of large subsidies, subsidies will be dramatically reduced in the coming years. Added to that, corporation tax will be paid, as it has been in every other privatisation in the past 17 years. Huge corporation tax income will flow to the Government. Indeed, the Government's amendment talks about
the prospects of better services and higher investment at less cost to tax-payers.
We need private finance for that investment.
I shall briefly instance some of the disadvantages that we have seen in my constituency from the rail system being in nationalised hands. Parbold station—a village station—on the way from Southport, which is on the coast, to Manchester, has never had access for the disabled. We were promised disabled access before the 1992 general election, and that we would have it within two months. It took three years of my chasing—often weekly and monthly—to ensure that we had disabled access.
I am certain that, under the privatised regime, disabled access will be a right at all our stations. Chorley station, which I opened some 10 years ago, has never had a telephone or a toilet. Surely, in privatised hands, we would see better facilities.


I liken the plans for privatisation between Railtrack and the operating companies to our proposals for health, which have been carried through to fruition, where we have the purchaser-provider breakup. In this case, the purchaser, the operating companies, require from the provider, Railtrack, the right facilities: terminals, stations, rail track, signalling systems, and high levels of safety. They will be able to demand and obtain those from their franchises.
After privatisation, Railtrack will be completely free to make long-term investments, as was so ably pointed out by my hon. Friend the Member for Keighley (Mr. Waller). At the moment, having to compete with education, health and the myriad Government priorities is impossible on such a short-term basis. We want long-term investment, in the interests of shareholders and taxpayers. We will see that in the private enterprise.
I am delighted to support the Government's amendment. I look forward to this country having a first-class rail system with more investment. I have total confidence in Bob Horton and his team. The idiotic criticism by the shadow Secretary of State for Transport was totally uncalled for. Bob Horton has proved over the years in the private sector that he knows how to run a show in the interests of shareholders.
I look forward to ensuring that there are fewer subsidies over the years, and a return to the investors in the shares. I look forward to buying some of those shares myself, and I would strongly recommend that to any hon. Member or any member of the public listening to the debate this evening. That is the way forward.
According to the opinion polls, most people think that the rail system will become less safe and reliable, and that there will be fewer services. We hear the same criticisms of every privatisation, but every privatisation has been a success, and I look forward to the resounding success of rail privatisation in the capable hands of Bob Horton and Railtrack.

Mr. Peter L. Pike: I am pleased to be able to speak in the debate. It follows the publication of the pathfinder prospectus earlier this week, which was a further step in the privatisation of Railtrack.
The Secretary of State did not say much about the Government amendment, and, having read it several times, I am not surprised. Let me draw attention to one little word in it—"prospects". The amendment refers to
offering the prospects of better services and higher investment at less cost to tax-payers".
I believe that the word "prospects" suggests a lack of certainty, even on the Government's part, that privatisation will deliver what is claimed for it. I have "prospects" of winning the national lottery—I buy a ticket every week—but as yet I have failed to win more than £10. Nevertheless, I think that my chance of winning the lottery is higher than the Government's chance of winning the next general election.
I do not believe that the Government are very confident about their proposal. They know that the opinion polls show that the public are opposed to rail privatisation. I shall not refer again to figures that have been cited several times today, but the fact remains that the public continually demonstrate their opposition to the

privatisation of the railways. Even more important, having been on the doorstep in South-East Staffordshire trying to get their people to vote for them in the recent by-election, the Conservatives must know that even the potential Conservative voters who remain are opposed to privatisation. They must also know that the majority of those who may have some sympathy with the proposal consider the method—the fragmentation—nonsensical. The general view is that we need an integrated, co-ordinated public transport system, and an integrated, co-ordinated rail system within that.
The one thing on which there has been broad agreement in the House is the need for investment in the railways. Everyone agrees that there has been a lack of investment—in varying proportions—over the past 50 years. Opposition Members believe that such investment should be made by a partnership: that public and private sectors should work together. We should not have the privatised nonsense that the Government propose; the public sector must play a major role.
As my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) pointed out, it is not just a question of investment. If we want people to use the railway system, we must employ more people. A few months ago, I travelled by rail to Tooting, which is not so far from the House of Commons. Although the station is manned during the day, it is unstaffed in the evening. On both platforms, people who clearly had no intention of travelling were throwing bottles and stones from one platform to another. It was late in the evening, and I was returning to the House to vote. I waited anxiously for my train, feeling somewhat wary and cautious. If I had been an old-age pensioner or a woman, I would have been terrified and would not have gone near the station. That is one reason why people are not using the railways: they are often afraid to.
Hon. Members on both sides of the House have mentioned access to trains and stations for the disabled. It needs to be improved. I accept that that cannot be done overnight—the cost would be astronomical—but passengers should be able to know where they can get on and off trains, and to expect assistance from staff whenever they choose to travel, not just until 6 pm or 7 pm. I do not think that the privatisation of Railtrack will provide the necessary investment.
In response to two interventions, my hon. Friend the Member for Birmingham, Ladywood (Ms Short) said—quite fairly—that British Rail was not perfect. She also said, however, that it was better than what the Tory Government now proposed. Conservative Members should remember that their party has been in government for 30 of the 50 years in which British Rail has been in the public sector, and that in a couple of weeks they will have been continuously in government for 17 years. They have a good deal of responsibility for the faults in the system. Yes, British Rail is not perfect. The Government may have to accept that they have failed in their duty as the nation's shareholder, controlling it without improving the position.
I accept that there are faults in British Rail. I am currently pursuing two issues with Railtrack. They may sound very simple. One involves litter on the track throughout the country. The track opposite Sefton terrace in Burnley was cleared only when we had a royal visit a few years ago, and has not been cleared since: it is currently an appalling eyesore. Must we arrange another


royal visit? Another eyesore is the track on the line to Padiham, where a power station has closed. The track has not been used for a couple of years.
Railtrack has responsibilities for such matters. I have not examined the Pathfinder prospectus, and I do not know what it says about Railtrack's responsibility for litter and fencing on the land that it owns following privatisation; but safety is currently Railtrack's responsibility, and it must clearly remain its responsibility following privatisation.
Why are the Government changing their policy? I accept that, when the Railways Bill was passed in 1993, it gave the Government the power to do what they are currently doing; no one suggested that they could not take such action. But did not the Government repeatedly say that Railtrack would be in the public sector for the foreseeable future? Did not the present Chancellor of the Duchy of Lancaster, the right hon. Member for Kettering (Mr. Freeman)—then a Transport Minister—say exactly those words during debate on the Railways Bill? What, at that time, was "the foreseeable future"? Was it only a couple of years, or was the Government's statement misleading? We are not allowed to accuse them of being deliberately misleading, but was what they said misleading? Has it been accepted that there has been a move to the right, and that the Government now believe that they must privatise something whose privatisation they formerly did not consider necessary?
Perhaps the Government need the cash for pre-election tax cuts. Perhaps that comment really hits the nail on the head. Perhaps they need the money. Perhaps they want to try to bribe the electorate. Would it not be a very expensive bribe to sell assets that are worth £6.5 billion for a potential income of £1.8 billion? It is outrageous if that is what the Government are going to do, because they are the custodians of the nation's assets.
We all remember Harold Macmillan accusing the Government of selling the nation's silver. With this privatisation, the Government are selling the nation's assets, and they are not going to get anywhere near the value for them that they should. They are failing the nation if they go ahead with the privatisation. If the £6.5 billion is not the true value of the assets, why are track access charges being based on a Railtrack value of £6.5 billion? The Government cannot have it both ways; one thing or the other must be wrong.
My hon. Friend the Member for Ladywood said that the annual taxpayers' subsidy to a privatised Railtrack would be £850 million more than it was prior to privatisation. The Secretary of State never responded to that. Is that correct or not? The Minister needs to clarify it. If it is correct, what will we get for that extra £850 million subsidy? Who will benefit from it—top management or shareholders?
The Secretary of State referred to employee shares and gave some detail on that proposal. We have seen it all before. Under the privatisation of PowerGen, National Power and others, special shares were provided for employees, but the employees did not get a director with those shares or any say in management. Although what happened with the Trustees Savings bank is slightly different because the Government did not get the proceeds of its privatisation, what happened to it is relevant. It also

said that it would ensure employees' interests through rights to discounted shares and that small shareholders would be protected. Within a very short period, once the protection under the relevant Act had passed away, the very small number of shareholders at the top were able completely to outvote the mass of small shareholders. Towards the end of last year, the TSB was no longer an independent body. It is now part of the Lloyds group.
It is absolute nonsense to fragment the railways in the way that the Government are proposing. Some of my constituents have already had difficulties travelling. One travelled from Burnley to London and back, leaving Burnley Central station on the East Lancashire line, which is owned by one company, going on to the west coast main line at Preston for the InterCity part of the route, and returning by InterCity on the same part of the route. The journey ended not at the same railway station in Burnley, but at Burnley Manchester Road station on the Roses line, which was opened a few years ago and has been extremely successful. It must be said that the line was financed jointly by the National and Provincial building society, which is sadly disappearing into the Abbey National, and Lancashire county council, which supported it very much.
My constituent's journey involved three different railway companies, and there was a problem on each part of the journey as well as at Preston station. Four people will have to deal with the complaint in four different sections of the newly privatised, glorified system of nonsense that the Tory party will force on us if it does not draw back from the privatisation of Railtrack. What a way to run a railway system; what a way to run a country.
The prospectus confirms that nothing will be gained in the improvement of train services by privatising Railtrack. It says:
Railtrack's passenger access income is unlikely to benefit materially from any increase in passenger use".
It also admits that increases in freight by rail are unlikely, stating:
The opportunities for expanding rail freight operations are limited.
The previous Prime Minister, Lady Thatcher, once responded to an intervention by saying that it was a funny old world. It is a funny old prospectus that says that even if passenger use is increased, not much money will be made by it, and that the only dividends will be those that the public provide in subsidy. That is why it is such nonsense to create an initial profit to give to shareholders almost as soon as Railtrack is privatised. What a bribe to get people to buy shares. What a fiddle. I call it that because that is what the majority of people believe it to be. That is not the way to do things.
Debt has been written off from every privatised industry. If anybody else takes over a company, they have to take over any debt as well. Yet when the Government privatised water, the debt was written off, and a massive debt will be written off when Railtrack is privatised. Why should not the privatised company be liable to pay that debt back to the nation in years ahead? Orange was recently floated. It was a completely new flotation, so I am comparing one new flotation with another. It has made no profit to date, yet the Government would not give it any money to give to its shareholders or say that they would subsidise its first dividend for anyone who decided to respond to its prospectus.


Safety is important, and there are growing concerns about it on the railways partly as a result of the state of the infrastructure. Fifty sections of track on the west coast main line are now subject to speed restrictions as a result of the state of the track. There was none when the British Rail infrastructure was transferred to Railtrack. Already, within a couple of years, it has deteriorated.
The west coast main line is in need of investment—we all know that. I recognise the difficulties and, to be fair to the Minister, I know that he recognises the need for investment and is sympathetic to it. We all know that investment concerns not only signalling, track, overhead cabling or rolling stock. Those things must all be invested in to produce the type of rail service that we need on the line, which, with all respect to the east coast, carries much more traffic and is much more heavily used. Major investment is needed.
We recognise the difficulties, especially for parts of the track on which high-technology signalling and a low-technology system for local services that use some of the same parts of the track will be needed, such as the track feeding into Preston, and so on. There would be such difficulties, whoever owned Railtrack. What the Government are proposing offers no speedier solution to the need for improvements to the west coast main line. The Minister will disagree, but the Government have got it wrong. We need a publicly owned railway transport system.
We need a combination of private and public sector investment, to ensure that we can improve the track and rolling stock to give us the service that we need as we move towards the 21st century. I believe that the way in which the Government are moving is totally wrong, and that the Labour party is showing the right way ahead. If the Government do not heed us and change their mind, they will find that this one issue will add even more nails to their coffin when they finally have the courage to face the electorate.

Mr. Bob Dunn: The hon. Member for Burnley (Mr. Pike) has been extremely frank tonight—not least in his last few words. He said that he is in favour of a publicly owned rail service. He is at odds with the Government, but also with Opposition Front Benchers and we await the speech from the shadow Minister to see whether that gulf exists.
I begin by welcoming the announcement by the Secretary of State about the requirement placed upon the successful bidder for rail services in the south-east to make a clear and unequivocal commitment to replacing all of the 40-year-old rolling stock on one of the busiest rail routes in the country. That is something that Members of Parliament representing Kent constituencies—including myself—have made representations about for some time, and I am delighted that my right hon. Friend has met the concerns of commuters in the county of Kent.

Mr. Bayley: The hon. Gentleman will realise that I have a constituency interest in the matter. The Chancellor of the Duchy of Lancaster—when he was a Transport Minister—said that the rolling stock would start to be delivered in 1995. Had the Government stuck to their commitment, the carriage works in York would still be in business. I agree that it is good that the rolling stock is

coming, but it is a shame that, under public sector control, the Government blocked the provision of that rolling stock, leading to the closure of the carriage works in my constituency.

Mr. Dunn: If called, the hon. Member for York (Mr. Bayley) can make his own speech later. All I say is that we have received an undertaking from the Secretary of State today that new rolling stock will be in place within three years. I will hold all concerned to that date, given that commitment by my right hon. Friend.
Hon. Members from both sides of the House have said what they want from the rail service. We all want a punctual and reliable service, and—from the consumers' point of view—we want as low cost a service as possible, but constant emphasis has been placed on the safety of the service. I resent the notion that in future under a privatised scheme there will be more examples of bad practice, dangerous accidents and damage to people and services. It is not beyond the recollection of many hon. Members—I do not want to make a political point on this—that there have been major disasters in the past, such as at Hither Green and Harrow and Wealdstone. We must be careful about making points about safety, as that can be deemed to be scaremongering. I am sure that Opposition Members would not wish to do that, and we must be careful about the extent to which we refer to safety.

Mr. Wilson: If postulated in that way, such claims can be deemed to be scaremongering. Does the hon. Gentleman not understand the distinction between saying that private operators are less likely to operate a safe regime—which is not the argument—and saying that a fragmented railway is inherently less safe than an integrated railway? If he needs further evidence of that, he should look at the Health and Safety Executive's report on rail privatisation, which said that a fragmented railway was likely to lead to more serious accidents than less. The report then made 38 serious recommendations to counteract that possibility. Is it responsible for a Government to put in place a railway that is inherently less safe than the one we have at present?

Mr. Dunn: The point that I was trying to make is that however much every hon. Member hopes for the minimum number of accidents, the fact is that—in its earlier nationalised state—there were accidents on the rail network. It is wrong to pretend that there was a golden age, and I hope that Opposition Members are not trying to pretend that there was.
Any debate on privatisation is bound to show clear blue water—the clear philosophical difference between the Conservatives and the Opposition. This debate on rail privatisation is no different from many of the debates that we have had in this House in the past 17 years, with—I am sorry to say—the same predictable estimates of gloom and doom, full-blown rhetoric, half-facts and scare stories from the Labour party. Why does Labour do it? It is fed partly by Labour's deep-rooted hostility to free enterprise and partly as a result of instructions from the vested interests—the trade unions that sponsor many Opposition Members.
I am sorry that the hon. Member for Hampstead and Highgate (Ms Jackson) is not here, as I was going to refer to her statement that she is no longer sponsored by ASLEF and is therefore able to speak in any way that she


likes. Her constituency party, however, is now sponsored by that union. The extent of that sponsorship is there for all to see. When she last registered her sponsorship, her constituency party received £5,500, and 80 per cent. of her election expenses were paid by the union.

Mrs. Gwyneth Dunwoody: Will the hon. Gentleman tell us who contributes to his election expenses, what firms he is connected with and what speeches he has made in this Chamber that vaguely reflect some of his involvement in industry?

Mr. Dunn: The hon. Lady knows that I am a great admirer of her—from afar. If she checks the Register of Members' Interests, she will see that I am sponsored by no one. I receive no sponsorship, and I have no outside interests. I speak entirely for the people who elected me—the people of Dartford. I understand her point, as clearly union sponsorship is a huge embarrassment to Labour. It is clear that any sponsored hon. Member is bought—not in the direct sense of money changing hands, but indirectly. Undue influence—or due influence—is brought to bear on individual Labour Members who have representatives from the unions that sponsor them sitting on their general management committees. If the hon. Member does not do what the union likes, he is called to account.
I was referring to scare stories, and I shall give two examples from the past. The House may recall the debates in the early 1980s on the privatisation of BT. During one such debate, the right hon. Member for Salford, East (Mr. Orme) said:
The public telephone box could be threatened with extinction."—[Official Report, 18 July 1983; Vol. 46, c. 41.]
The truth is that the number of BT call boxes has increased by more than 50 per cent. to 127,000, 96 per cent. of which work at any one time compared with 75 per cent. in 1987.
The second example concerns British Airways. The hon. Member for Glasgow, Garscadden (Mr. Dewar)—who has just walked into the Chamber—said in a debate on the Civil Aviation Bill that British Airways
will be the pantomime horse of capitalism if it is anything at all."— [Official Report, 19 November 1979; Vol. 974, c. 125.]

Mr. Donald Dewar: That was 16 years ago.

Mr. Dunn: It may have been 16 years ago, but the hon. Gentleman is as wrong now as he was then. British Airways is the world's favourite airline, and carries more international passengers than any other carrier—some 6 million more than its nearest competitor in 1993. We know what the Labour party wants. As the hon. Member for Burnley said—with the characteristic honesty and frankness that has made him famous throughout Burnley—Labour wants a state-controlled rail monopoly, run for and by the trade unions. We want a rail service that is modern and dynamic, run for and responsive to the needs of the British travelling public.
Opposition Members have referred to opinion polls. We can all quote opinion polls in aid of our argument. The Guardian of today's date contains two interesting articles.

One is about the leaked letter from Mr. Welsby. The one underneath, which I would like to know more about, is headed "Short taxed again by Blair lecture". If that relates to the meeting between the shadow spokesman and the Leader of the Opposition, I really would like to know what commitment she had to give to him, but alas I am sure that we will never know what went on.
The first article refers to the leaked letter dated 2 April to Sir Patrick Brown from Mr. John Welsby. It outlined a number of concerns about the prospectus. The article says that a spokesman for the Department of Transport said:
Sir Patrick has responded to Mr. Welsby and is satisfied that all his fears have been allayed.
The article goes on to refer to an ICM poll that was taken between 12 and 13 April last. It asked 1,200 adults aged 18 and over whether they thought that when British Rail was fully privatised services would be better or worse or they did not know. The result was that 33 per cent. believed that services would be better, 20 per cent. did not know—they were neutral—and 47 per cent. believed that services would be worse. My arithmetic is as good as anyone else's and I conclude that 53 per cent. were either neutral or thought services would be better and a minority—albeit a substantial one—of 47 per cent. thought that services would be worse.
The next question was whether those interviewed thought that when British Rail was fully privatised services would be safer, less safe or did not know. The result was that 34 per cent. thought that services would be safer, 24 per cent. did not know and therefore must have been neutral and 43 per cent.—still a significant minority, but fewer than in response to the previous question—believed that services would he less safe. It is interesting that the opinion poll commissioned by The Guardian—a paper not sympathetic to my point of view—gave that result.

Mr. Wilson: Read the next question.

Mr. Dunn: I have some difficulty with the next question because, unfortunately for The Guardian, not all the figures add up to 100 per cent. For the first question the figures add up to 100 per cent., for the second they add up to 101 per cent. and for the third—whether services would be cheaper, dearer or they did not know—they add up to 99 per cent.

Mr. Wilson: Give us the figures about fares.

Mr. Dunn: I must be in control of my own track on this matter rather than respond continually to the hon. Member for Cunninghame, North (Mr. Wilson).
Opinion polls play a significant part in the thinking of the Labour party today. If Labour Members are motivated in their desires by an opinion poll of this sort, which they would say gave some credence to their ideas, what about the opinion polls in which 75 per cent. of those polled say that they believe that there should be a return to grammar schools? Why do they not take that into account? Labour Members are making highly selective use of opinion polls on this occasion. If they ignore opinion polls that call for the return of grammar schools and the restoration of capital punishment or come out against a federal state or a single currency—all the things that any hon. Member may care to adumbrate in a speech—why do they single


out this example? Why do we have the Labour party wholly run by opinion polls on this issue? It makes out that it responds to every issue on which the public express an opinion.

Mr. Wilson: Will the hon. Gentleman give way?

Mr. Dunn: No. I am about to make an entirely new point.
Not too much mention has been made today about the fat cats. I thought that we would get a certain amount of that. I wonder why. It is interesting. I think there is a problem here. Fat cats in the former privatised industries are one thing, but what about the fat cats in the private sector per se? The Labour party complains about those who receive large salaries for having huge responsibilities. It does not complain about the chairman of ICI or the chairmen of the boards of J. Sainsbury or Marks and Spencer, but they complain about people who have huge responsibilities elsewhere. It is a fair point and they can make it as often as they like, but what about the fat cats who support the Labour party?
What about Maureen Lipman, Melvyn Bragg and Ken Follett, who earn hundreds of thousands of pounds a year? We have to be careful in our attitude to fat cats. The Labour luvvies, whom Labour Members love to adore, are the fat cats who pay for the champagne parties that they all go to.

Mr. Terry Dicks: Who elected their leader and pays for his expenses?

Mr. Dunn: I do not know about that. I am sure that my hon. Friend can make that point in a different way. It all comes down to the fact that the Labour party has not changed. It is still being run for the unions and by the unions; Labour Members' links to the unions are their Achilles' heel. Do not claim victory yet. There is a long way to go to the next general election. When people start to see the traditional links between the Labour party and the trade unions and the range of activities that will count against it, it may well be in deep trouble.
A little has been said today about the esteem of the workers. A newly privatised rail service would give those who work in the railway service a chance to be proud of the work that they do. Railway workers will not be the music hall joke of the past. They will not be the butt of the joke at the dinner party. They will be given a real chance to show that they can work with efficiency, pride and determination in a privatised system. I am sure that they will do that.
Labour opposes privatisation for the railways today, as it opposed every other privatisation. It believes in nationalisation, public control, levers of power and giving more powers to the regulator—about which the hon. Member for Birmingham, Ladywood (Ms Short) made a thin point. I am not sure what all these levers are going to do and what these notions will bring about. Nationalisation is Labour's only policy and it has proved a failure. Therefore, I urge all my hon. Friends to support the Government's amendment tonight.

Mrs. Gwyneth Dunwoody: I must begin with an apology to you, Madam Speaker, and to the House. As the Government refuse to debate

transport in their own time, Her Majesty's loyal Opposition frequently have to use the time allocated to them for debates on transport. Those of us who have a specific interest in transport were upstairs in the Select Committee on Transport when this debate began. I apologise to the Secretary of State for not having heard his speech. I hope that the Minister for Railways and Roads, as well as the Secretary of State, will not think that I am being unduly familiar if I say that I have heard them once or twice before on the subject. I can quote almost verbatim most of the well-worn excuses that they trot out on every occasion.

Mr. Watts: Without wishing to be discourteous, I could say that the feeling is mutual.

Mrs. Dunwoody: I am happy to continue the relationship until the Minister leaves us at whatever point, either because in his Department the only thing that is certain is that there will be a rapid changeover or because the electorate finally get the opportunity to express too plainly their views on the Government's policies on transport and on every other aspect of their political programme.
The reality is that tonight we have one simple and important case. It is nothing to do with the absurdities that we have heard this evening. It is a charge of bad faith. That is the simple, essential charge against the Government. They came to the House of Commons, not in one debate but in many weeks of debates in Committee, and said consistently that they would privatise the railways and bring enormous benefits to the customer and everyone working in the system, but that in order to do so they would not privatise Railtrack. Railtrack, we were told—the core of the system—would remain within state control. That was the constantly reiterated argument.
The Government admitted that they intended to fragment and flog off all the other bits, always to the advantage of the people buying the assets, and every known piece of land to a private company, but they said that that should not worry anyone because Railtrack would remain within the state system; it would not be immediately privatised. The Government soon discovered that from their point of view that was not an acceptable plan. The reason was terribly simple. The privatisation had been forced with indecent haste. It had so little to do with the subject matter that sometimes it gave a certain legitimacy to suggest that the Government were doing it because they cared about transport. The reason they were doing it was very simple: they wanted to fill their coffers before the next general election. There are still Conservative Members—not many—who have a sense of responsibility to their constituents and who know that what is proposed is totally unacceptable and unworkable. Tonight they will have their last chance to vote against it.
The reasons against privatisation have been adduced so often and in such clear terms that we do not have to say to people, "Look at what has happened since privatisation, look at the problems with the safety case, look at the difficulties with people who we were sure were going to produce new rolling stock and improve facilities, and look at what is already becoming clear," because those things are already plain to the travelling public. People who use Euston station have no doubts about the problems and difficulties that arise as a result of privatisation. They can tell us that every train is late—up to 94 minutes late.


It is far worse than that. In their period in office the Government have consistently followed one plan in relation to the railway system—to capitalise on the assets and to get rid of the amount of money paid from the Treasury for the maintenance of the transport system. That is why it is quite funny to listen to Conservative Members saying, "Look at the other side of the channel and at what is happening in France. They have got a good system—we do not have one like that." Of course we do not have a system like that in France—it has a socialist Government who put money into infrastructure.
In my constituency, British Rail Engineering Ltd. was sold—a firm that not only was capable of producing high-quality rolling stock but had a long experience of doing so. All the information structures—information services that provide high-quality management control to the British Rail network—were sold off to private departments. A series of small depots were hived off in a way that somehow showed that they were expected to take vast amounts of maintenance work from the old workshops. Of course, because the Government reneged on their promises about the amount of money that they would make available—both for the rolling stock and for the development of new systems—all the people who bought state assets have been faced with the reality that the Government did not mean what they said.
The firm that bought BREL in my constituency was assured that because it was a private firm it did not have to worry—there would be a big order book and there would be a lot of new rolling stock. They were told by the Transport Select Committee that there would be a hiatus for a minimum of three years if privatisation went ahead. However, that was ignored. The private buyers were told, "Don't worry—all the new rolling stock is needed, all the new contracts will be placed and all the new private buyers will find that they are making a large amount of money."
That did not happen at all. Not only was my constituency decimated in terms of jobs, but the constituency of my hon. Friend the Member for York (Mr. Bayley) was so badly damaged that thousands of people lost their jobs. Derby is in the same situation as Crewe. I am referring to rolling stock, which is just one side of it.
The Government have created a highly complex system of financing and they are not prepared to remind the electorate that at the end of all this—when the Government have sold off every platform, every station and every square yard, when they have managed to cheat all the existing employees out of their rights to have any say in the future of their industry—they will still come back to the House and demand more than £600 million extra subsidy for the private system. That is what is happening—that is total effrontery.
The Government are not concerned with creating a modern transport system and they never have been. Their simple aim was to cut down the amount paid by the Treasury in subsidies and to rearrange it in such a way that when it went to the private sector it was not nearly as obvious how much their colleagues in the City were going to walk away with. That is what they have done—and very successfully.
The Government have deprived my constituency of trained jobs, they have deprived the railway system of rolling stock and they have fragmented the basic core railway in such a way that there are real problems with safety, development and management. They have undermined the morale and the future of the people working in the industry and, in return, they have assured us that we do not have to worry about it and it will all be marvellous in the future. That is not only dishonest but unacceptable.
The hon. Member for Dartford (Mr. Dunn) said that we should look at what happens when people give their views to opinion polls and assess whether that is something that we should worry about. I remind him of an opinion poll that was much more effective: the one for the by-election last week. If that does not make him and his colleagues think seriously, there is absolutely no hope of their treating this subject with the importance that it deserves.
When we go into the Division Lobby tonight, Conservative Members ought to consider strongly the charge of bad faith. It is something that their constituents will hold against them. People are not stupid. They can work out that if the Government sell off Waterloo international station, plus all the land around it and all the benefits of the Euro-line and rolling stock, they are not handing away a debt but giving a positive benefit to a private developer. People do not have to be told that privatisation is a great success—they have only to look at the water service utilities and at the Japanese flag flying over the Greater London council building to know what the reality of privatisation is under this Government.
I am deeply angered by the Government's cynicism and their refusal to take the interests and the needs of their constituents into account. I find it difficult to behave as though Parliament can accept the totally superficial and embarrassing level on which some speeches have been made tonight. To me what is important is that the transport system is being wrecked for purely ideological, purely unacceptable and deeply ignorant reasons. I can only say to Conservative Members: on their heads be it. Frankly, the electorate have noticed what they are about and they do not like it.

Mr. David Tredinnick: Towards the end of her speech, the hon. Member for Birmingham, Ladywood (Ms Short) accused the Government of creating something far worse than the old British Rail. As she said that, I had a vision of her standing at the Dispatch Box when we debated the gas privatisation legislation. I heard her saying, "Today the Government are creating something far worse than the gas board"—we can now look back and see that the price of gas has gone down 25 per cent. for domestic users. I then saw the hon. Lady speaking on the electricity legislation; domestic prices for electricity have fallen substantially—and they fell in the first three years post-privatisation.

Mr. Wilson: I am not sure whether the hon. Gentleman is interested in historical accuracy, but he will get some. Will he confirm that the price of gas is higher than it was when the Tories came to office in 1979 and started to force gas prices up pre-privatisation? I pre-empt his next


remarks and ask him to confirm that, since privatisation, the electricity industry has given less to the Exchequer in tax proceeds than it did prior to privatisation in profits.

Mr. Tredinnick: I shall not trade statistics with the hon. Gentleman, but the gas control centre for the southern part of England, which I visited recently, is in my constituency. There is general agreement that consumers have benefited from gas privatisation and that prices have come down.
Consider the privatisation of British Airways, a remarkable global company. My hon. Friend the Member for Dartford (Mr. Dunn) quoted what was said by the hon. Member for Glasgow, Garscadden (Mr. Dewar). What would the hon. Member for Ladywood have said then—that the Government were creating something far worse than the old British Airways? That is nonsense. All the privatisations that have been conducted under my right hon. Friends the Prime Minister and Baroness Thatcher since 1979 have benefited the consumer and cut the drag on the taxpayer. The old industries imposed enormous costs of about £55 million a week at one time, but they developed into profitable industries and many of them are taking on employees.
What about British Telecom? What would the hon. Member for Ladywood have had to say about "Post Office Telephones"—or was it "Post Office Telegraphs"? I forget. Where would Britain be today if our telecommunications network were still run by the Post Office? I remember selling computer and fax equipment in the 1970s when one could not get telephone lines. My hon. Friend the Member for Dartford referred to the problems with telephone boxes, but one could not even get lines installed.

Mr. Stephen Day: It used to take weeks.

Mr. Tredinnick: It took weeks. Businesses and private subscribers used to bribe Post Office engineers to stay in during their lunch breaks to put the lines in. The argument that privatisation has failed the consumer is simply not true. The hon. Member for Ladywood has got into a lot of trouble in the past few days over her proposal to put up taxes for the middle classes. She spoke with conviction, and the attempt of Labour party minders to muzzle her was not completely effective. She tried to commit the Labour party in its next election manifesto to a massive further increase in spending, because she talked about getting a high level of services by high investment. We know that she is against privatisation, because she has spoken against it this afternoon. Where will the high level of investment come from? It will come from the taxpayer. Taxes will have to rise if the sort of the investment that she outlined is to manifest itself.
This is one of the most important denationalisation debates in the four terms of this Government. Privatisation will vastly improve the quality of passenger services. I hope and believe that it will improve the distribution of freight, although there is a much work to be done on that. If we get freight right, the cost to businesses across the board will be reduced. I agree with the hon. Member for Eastleigh (Mr. Chidgey) that the Bill is important from an environmental perspective. Environmental issues are, generally speaking, of greater concern to the public than they were a few years ago, and that concern will increase.
What about the quality of service for passengers? When I went to buy a ticket from British Rail, I always felt—especially at main line stations—that I was doing the man behind the counter a favour. The attitude was that I was jolly lucky that he was selling me a ticket. I always resented that and it was quite wrong. Under British Rail, the railways have been run as much for the employees as for the passengers. I do not dispute what the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said about the case for looking after employees. She and the hon. Member for York have argued that case eloquently over the years. Nevertheless, in considering the national railway system the passenger and related issues must be the overriding concern.
My right hon. Friend the Secretary of State outlined the improvements that have already been provided under the privatisation proposals that have been implemented so far. I will not run over all his points, but he mentioned that South West Trains had introduced new bus services and new waiting rooms. The hon. Members for Hampstead and Highgate (Ms Jackson) and for Burnley (Mr. Pike) complained about the lack of facilities and waiting rooms. The truth is that the newly privatised companies are proposing to put in new waiting rooms on those lines. That is how to attract ladies to travel at night and stop the fear to which the hon. Member for Burnley referred.
I will go further and say that privatised services will reintroduce conductors in certain carriages to ensure that people travelling at night feel secure. Other improvements have been mentioned, such as the new motorail services that Great Western has in mind and the South West Trains proposal to put services through to Salisbury and Epsom. Great Western has a significant proposal to put brand-new rolling stock on its express trains.
Labour Members have argued that there will not be any rolling stock improvements and we have heard a lot about banging doors. The facts are different; they are in the public domain and available in the Library. Already some of the services, including Great Western and the Gatwick express, are committed—by 1999 for the Gatwick express—to have completely new rolling stock.
Isambard Kingdom Brunel would have been proud of the newly privatised Great Western. He built that railway to a higher standard than those in the rest of the country with a 7 ft ¼ in gauge. It is a lasting sadness that Parliament decided that that gauge should go. If Great Western decides to run an improved service to the west country, it has the benefit of wider tunnels. The tunnel under the Bristol channel was built to the 7 ft¼ in gauge for two lines; Sonning cuttings is built for the same gauge. It is possible to run wider trains out of Paddington into Bristol Temple Meads. There are many possibilities of taking ahead Brunel's vision on the west country lines.
I mentioned the possibility of conductors being used on services. Consider the rail infrastructure in New York. On the line that runs from 666 Fifth avenue in the middle of the midtown commercial residential area, the E train that goes to the major airports has guards and special facilities to help passengers. That was done to build confidence in the system. The way forward is the flexibility of the newly privatised companies that will enable additional services to be provided—not a reduction in services.
Privatised railways tend to attract passengers. Two lines run from the centre of Tokyo, the capital of Japan, to the airport. The nationalised railways, which we know are


wonderful, include the Shinkansen high-speed rail system which runs around all four islands of Japan. It is one of the finest in the world, but there is also a private line that runs on a snake-like route through the suburbs. I travelled on that line a few years ago. It is a miracle of inventiveness because it is a terrible piece of track, but it is managed in such a way that it is run as a non-stop service despite going through level crossings right through the Tokyo suburbs. It has proved to be a better service and is more popular because it is more carefully managed. It provides what the people want.
One surprising, although significant, aspect of rail privatisation is that the companies that are taking over parts of the network have decided not to create new names, logos or brands, but are using names that go back at least 50 years. Great Western and Great Northern are a return to the groupings that existed before the London and North Eastern railway. Another is Great Eastern. They are names from 50, 60 or 70 years ago.
Why do people still look back to that era as a model to emulate? The straight answer is that those railway companies were run by people with immense pride—by the families who were associated with them. Lord Portman was the last chairman of the Great Western railway and he rode on the footplate at least once a week on his main line—[Interruption.] I will give way to the hon. Lady if she disputes that.

Mrs. Dunwoody: I think that the hon. Gentleman has just encapsulated the seriousness with which the Conservative party treats the debate on transport in 1996.

Mr. Tredinnick: I am glad that I gave way to the hon. Lady. I was pointing out that the most important person in the company used to ride on the footplate with the engine driver and the fireman to find out how the service was running. I do not believe that that is happening in the nationalised railway of today.

Mrs. Dunwoody: He was running his office while riding the train.

Mr. Tredinnick: If the hon. Lady wants to intervene again, I shall give way.

Mr. John Heppell: Can the hon. Gentleman tell us how many times Bob Horton has been working on the footplate in the past year?

Mr. Tredinnick: The hon. Gentleman is trying to make a point, and I do not blame him for that, but I said riding on the footplate, not working.
Why were those railway companies held in such high regard? Why did they have that esprit de corps? I am provoking Opposition Members. I will give way to the Labour Front-Bench spokesman.

Mr. Wilson: The merest twitch of a muscle and the hon. Gentleman offers to give way. It is very encouraging. We are on a serious point. Let us get a little consensus. Will the hon. Gentleman join me in condemning any of the franchisees that reduce the two-man operation of trains to single-man operation by removing the guard?

Mr. Tredinnick: The hon. Gentleman is very ingenious in somehow linking the good name of the Great

Western and Great Northern railways with the two-man system of driving and guarding trains. I do not want to be drawn into a debate.

Mr. Wilson: We are in a debate.

Mr. Tredinnick: We are, and the facts are that some trains can now be run without two men—that happens on the underground in London because of the improved signalling system.
There will be a different level of service on the new railways because of the new blood that is coming in. I shall give two examples of that new blood. A French company is buying in—I should say investing—as is an American company with much experience. That transfusion of new ideas is in no way detrimental to the interests of passengers or of anyone else in this country, and I foresee extra employees on trains.
On the Japanese Shinkansen system, a trolley of food and drinks is constantly taken up and down the carriages and there are telephone services. I understand that Virgin is going to introduce telephone and even television services in the first class section. That is the way to get passengers back. Those needs have to be serviced with such facilities.
My hon. Friend the Member for Chorley (Mr. Dover) and I had the honour of serving on the Select Committee on the Channel Tunnel Rail Link Bill. As you will be aware, Mr. Deputy Speaker, consideration of that Bill took longer than the Great Western Railway Bill in the 19th century. I think that the Committee sat for 300 hours. In fact, we sat for a year—long enough to walk from here to Madrid at a leisurely pace across the Pyrenees with a short stop in Paris. It was an instructive experience considering the difference between the French and British rail networks and the problems of the network in Britain.
Looking to the future, if we imagine Britain's rail network coming into London as the branches of a tree, the channel tunnel rail link, when it is built—and it will be—represents the trunk. As people and freight travel down that high-speed rail link, it will become increasingly important for Britain's links with Europe and its prosperity. That new and vital railway is to be built, not by the state but with private money and to a very high standard. That is another reason why the railways should be privatised. It is incompatible to run the east coast, west coast, midland, Great Western and southern main lines—the five main groupings—as state industries when there is a tendency in Europe towards private systems, which are more effective.
The principal hub in London will be at St. Pancras and there will be another at Waterloo. With the privatisation of our railway companies and the new CTRL line, we will have a dramatically improved service for everyone. Bringing the west coast main line into St. Pancras—the Channel Tunnel Rail Link Bill Select Committee did not recommend that, but the company that is to build the line has volunteered to do it—is significant and important for all hon. Members whose constituencies lie on or near that line.
I must refer to two more issues, freight and the environment. First, one of the great catastrophes of the post-war British rail network has been the decline—one might say the demise—of freight. It is appalling that so little freight is carried on British Rail. In fairness to


British Rail, it has been difficult. The improvement in the road network has been a disincentive, but British Rail's pricing policy and the quality of the service has been poor. If we are to be competitive in Europe and to get our goods over there, we need the enhanced system that the channel tunnel rail link will bring. I certainly welcome the proposed new freight terminals—the one near the M1 and A5 near my constituency will be significant. Through privatisation, I hope that we will not only enhance passenger services but make it easier, cheaper and of greater interest to businesses to put freight back on to rail.
Secondly, on the environment, people are increasingly concerned with environmental matters. The road programme is being cut and there is huge concern about fumes and congestion, as well as worries about protecting our countryside. I do not think that we will see improvements in the scale of the network, which is expanding again, or in the quality of rolling stock and equipment in a nationalised industry. For example, one notices quite a lot of pollution when travelling on diesel trains and I think that the denationalised private companies will start to filter the air on trains—[Interruption.] It is perfectly possible and the public will demand it.
My hon. Friends have referred to improved facilities for the disabled—I think that my hon. Friend the Member for Dartford did so. People demand and expect better facilities for disabled people, and that is absolutely right.
The midland main line goes through Leicestershire and I hope hon. Members will forgive me if I briefly refer to the importance of that line. National Express is the preferred bidder and I understand that the bid is with the Office of Fair Trading. To understand the possibilities for the midland main line when it is privatised, my constituents must consider what has happened with Great Western, South Western and the other lines that have already been privatised.
A betting person would have to say that, given the new facilities that have been introduced, many benefits will flow to the midland main line, which goes from London St. Pancras to Leicester and on to Sheffield. I expect a much enhanced service. Having served on the Select Committee on the Channel Tunnel Rail Link Bill and having always taken a great interest in railways, I look forward to pressing National Express, if it wins the franchise, to provide the kind of service that my constituents expect. If it wins the franchise, that company will have a wonderful opportunity in that the service will finish at the new and soon to be much improved St. Pancras terminus.
Privatisation is the only way forward for Britain's rail system. It will greatly benefit passengers and will enormously enhance their lives and the quality of travel. Privatisation is also vital if we are to get freight back on to the network. It is a disgrace that so little freight is carried by rail. We need to attract it back to the railways to take the pressure off the motorway or road system. The public now have a greater awareness of and interest in environmental matters, and privatisation of the railways will improve the environment, something to which we all aspire.

Mr. Hugh Bayley: The hon. Member for Bosworth (Mr. Tredinnick) concentrated more on the railways and associated matters than many Conservatives

who have contributed to today's debate. He spoke of freight, but the pathfinder prospectus for the sale of Railtrack states that the carriage of freight on the railways has declined for several reasons. One is the collapse of heavy industry in this country—it is mainly heavy materials that are more suitable for carriage by rail rather than by road—and another is the Government's decision to increase to 44 tonnes the size of lorry allowed on our roads.
To say that privatisation will magically shift freight from road to rail, which needs to happen for environmental reasons, and to say that without any evidence of the policy changes to make it happen, is simply to express a pious hope. We need those policy changes, but it will be harder to introduce them when the freight companies are not run by the Government.
The hon. Gentleman said that the quality of service on a publicly owned system is poor and inevitably poorer than on a privately run system, but that is not so. His examples of what a private company could do are already being done by a public sector British Rail. There are telephones on trains—I use them every week going up and down to York. I say "telephones" because there are more than one. A trolley service goes up and down the train offering tea and coffee, and there are complimentary seat reservations.
The man who used to run the east coast main line service travelled on it every day. Unfortunately, he has not won the franchise to run the service. When he ran it as a British Rail service, it made a profit of £76 million a year, which went to the Treasury or to British Rail's coffers and was recycled to provide other services that needed a public subsidy. The person who has won the franchise to run the east coast main line will be paid a similar sum to run the service but he will be subsidised by the Government instead of contributing the profits to the rail network.
It is not true that all public rail services are bad and all private rail services are good. Rail services in which decent investment is made are good and those in which it is not are bad.
The Independent yesterday carried an article stating that Railtrack's executive directors will pick up bonuses this year that could double their salaries. That will cost almost £1 million a year. According to The Independent, the bonuses will be paid in Railtrack shares.
From the hon. Member for Dartford (Mr. Dunn), who has now left the Chamber, we heard the new politics of envy—the Conservative party saying that it is deeply upset that a number of successful business people are contributing to the Labour party. The hon. Gentleman felt that that was a disgrace.
The public in general are angry about the telephone number salaries of directors of recently privatised companies. They are surprised because those directors are doing broadly the same jobs as they did when they ran public sector water companies or various public sector utilities. In the main, their jobs are substantially different from those of directors in sections of the economy that have always been in the private sector.
If a company is manufacturing a product in competition with another company manufacturing the same product, it is perfectly reasonable for someone to be rewarded if he takes market share from the competitor, but the vast majority of the newly privatised utilities are private monopolies.


A senior manager of a big food company in my constituency recently told me that he was seething with anger at the way in which the bosses of the privatised industries had inflated their salaries two, three or fourfold. He was angry because he said that they are not engaged in competition. They work in monopolies and can simply abuse that monopoly to pay themselves more.
The public will therefore perhaps not be surprised by the news in The Independent that Railtrack's executive directors are getting on the gravy train with which we have become so familiar. However, I am surprised because of the answer to a question that I asked on 23 October last year. I asked the Secretary of State:
how many shares and share options will be issued free or at a reduced price to Railtrack directors when the company's shares are put on the market; what he estimates the total value of directors' free shares and discounts will be; and how many directors will be eligible".
I received a simple, straightforward answer from the Minister for Railways and Roads:
There will be no share options for Railtrack directors."—[Official Report, 23 October 1995; Vol. 264, c. 581.]
However, we now find that the directors are to double their salaries and that that doubling will be paid in shares.
The pathfinder prospectus, which was issued on Monday, is meant to promote the sale that we are debating, but it reads more like a dodgy estate agent's list of property particulars. We all understand the technique. Such particulars say, "This property has panoramic views", which means that the sunlight is blocked by the gasworks; or they say, "This property has excellent letting potential", which means that it is not suitable for owner-occupation. That very technique is used in the pathfinder document.
The important thing about the 250-page document is not what it says but what it skates over, weaves around, or leaves out. For example, page 15 states:
It is Railtrack's policy to develop its property portfolio with a view to maximising the benefits to Railtrack's customers and shareholders.
One might have thought that that was a good thing and that perhaps customers might benefit, but the customers are not the passengers. According to the small print, the customers are the 25 train operating companies. In other words, the privatised train operating companies and Railtrack shareholders will get the benefits of the sale of Railtrack's property assets; the travelling public will not.
Railtrack's relationships with the train operating companies were graphically illustrated last autumn by the pathetic pantomime of the publication of BR's winter timetable, which was found to be so riddled with errors that Railtrack was forced to print a 400-page revision. It contained so many errors that Railtrack then published a further 91-page correction. Hon. Members may think that I refer to that incident to make a gratuitous sideswipe at the way in which Railtrack has been run, but I do not raise it simply for that reason. The implication is obvious: Railtrack failed to do the job that British Rail, as a public sector company, managed to execute perfectly twice a year for a long time.

Mr. Hawkins: Surely the hon. Gentleman will concede that British Rail, as a nationalised organisation, was

forced to publish substantial corrections to its timetables on several occasions. It certainly did not always have a perfect timetable. If he wishes, I can give him chapter and verse of the many occasions on which British Rail was forced to publish supplementary corrections.

Mr. Bayley: I have seen supplementary corrections to the BR timetable: they are usually quite small and printed on newsprint-type paper. British Rail never published a 400-page correction so riddled with errors that it was followed by a further 91-page correction.
That was a classic failure by Railtrack and it is important to the debate because the timetable is the core document in Railtrack's business. The timetable is enormously important to passengers, who are having difficulty working out when trains will run because of that fiasco.
Page 10 of the prospectus states that Railtrack's principal customers are the train operating companies. It says also that 94 per cent. of Railtrack's income is derived from track access charges, which are based on train movements. The overwhelming majority of train movements—about 99 per cent.—are set out in the timetable. If Railtrack cannot specify train movements correctly in its timetable, it cannot bill the train operating companies correctly.
As the timetable is central to Railtrack's business, the regulator takes an interest in how it is prepared. The regulator has produced track access conditions requiring Railtrack to publish six times a year a timetable—upon which the public timetable is based—for those working in the industry. Linked with the six editions of the working timetable are three consultation and bidding rounds for the train operating companies. As required by the regulator, they receive a draft timetable and they may then bid for changes to it.
As Railtrack is completely unable to run the system properly, the Rail Regulator has been forced to reduce Railtrack's obligation temporarily from six working timetables per year with three bidding rounds to two timetables per year with two bidding rounds. He describes that as an interim measure. However, if one refers to page 31 of the prospectus, one can see that Railtrack believes that it will never manage to meet the Rail Regulator's timetabling conditions. Therefore, it intends to ask for the interim measure to become permanent.
Why is that necessary? As Labour Members warned when the Railways Bill passed through the House, Railtrack has found that a fragmented railway—with many different, competing companies reaching agreements and billing each other for services—is much more difficult to organise and to operate than the vertically integrated, single national railway that existed under the BR system. Therefore, at the heart of Railtrack's business is the computer system into which the train operating companies enter bids for train paths and by which Railtrack bills companies for the paths that they use.
That computer system is ready to crash: it cannot meet the Rail Regulator's requirements for 18 bidding rounds a year and six working timetables. Railtrack intends to ask the Rail Regulator to reduce the 18 bidding rounds to four, as that is all that it can cope with. It also wants to reduce the number of working timetables from six to two.


The old system BR operated was relatively simple: the Protim software system managed train paths in each of the eight BR regions. Information was fed into that system and the timetable was produced. As the operation of the rail system is much more complicated nowadays—companies do not simply register a single journey, but are billed for a journey stage by stage—and as rebates must be paid when the service provided by Railtrack does not meet the specifications agreed with the train operating companies, Railtrack has contracted a computer software company, SEMA, to design a new software system to run its computerised heart.
The system is called A-Plan. Railtrack has spent about £10 million on it, but it does not work. As a result, Railtrack has been forced to go to the regulator and say, "The bidding process that you have specified cannot be met. We must change to a much simpler system not temporarily, but permanently".
Page 32 of the prospectus states:
In producing each working timetable, information is transferred between Railtrack and the train operators, usually on paper.
It is transferred in that way because Railtrack's computer system cannot perform the task electronically. The prospectus continues:
New computer systems which will allow more data to be transferred on electronic media within Railtrack and between Railtrack and the train operators are currently being developed and tested".
They are the computer systems that Railtrack was required to have in place and up and running before the sale, but it has failed to meet that requirement. Those are the sorts of dodgy, estate agent-type particulars in the prospectus. I am sure that lawyers have pored over it in detail and that the prospectus contains no information that is untrue. However, I am sure also that many points have been omitted and that many others are intended to mislead.
The Government do not seek to warn prospective investors of the dangers that they face if they invest in a project that has run behind schedule ever since the passage of the Railways Bill and has been devised as it went along. Despite running Railtrack as a public sector company for two years, the teething problems have not been resolved. Railtrack is being sold not as a going concern but as a body that cannot meet the Rail Regulator's requirements.
The computer system is not the only thing that is not ready for the sale. On Monday this week the Transport Salaried Staffs Association released the results of a survey of Railtrack managers. Some 82 per cent. of middle managers working for Railtrack oppose the privatisation of Railtrack and 51 per cent. of senior managers oppose its sale. Almost three quarters of Railtrack managers—73 per cent.—say that the Government should delay the sale. Many of the managers who responded to the survey wrote to explain their views. One of them wrote:
Asset condition surveys and record updates won't be completed by April.
The prospectus admits that, albeit in a very roundabout way. On page 35, it states in relation to the asset condition of the track:
Although Railtrack has limited data on ballast renewal requirements, the Directors believe that, based on the knowledge and experience available to Railtrack, they have been able to make a reasonable assessment of the likely rates of renewal of rail sleepers and ballast over the ten years from 1 April 1994.

The prospectus includes some figures, but admits that they are based on guesswork, not an engineering survey of the condition of the track.
In relation to route structures such as bridges, culverts, cuttings and tunnels, the prospectus states:
Railtrack has undertaken a review of … the information it has on the condition of its assets. The Directors are satisfied that, notwithstanding the variable quality of the data currently available … they have been able to make a reasonable assessment of the likely requirements for the maintenance and renewal of route structures.
Again, that is based on guesswork.
People are buying into a business where the long-term costs are unknown and unquantified. That applies not only to route structures but to the backlog of maintenance of buildings, stations and signalling. All those issues were meant to have been spelt out before Railtrack reached the point of privatisation. That has not happened. Even to those who are in favour of privatisation it is clear that Railtrack is being privatised before it is ready.
In their response to the survey, the managers said that there were serious safety implications. One wrote:
Safety systems are not ready.
Another said:
No safety systems are in place. There is total chaos in my area—possession planning.
That is the business whereby Railtrack takes over the train path from the train operating company in order to carry out maintenance. He continued:
It is an accident waiting to happen.
We should bear in mind that that was not a small survey; it covered 559 Railtrack managers.
The Government should heed the advice of managers in the industry that they are trying to privatise. If they do not do so, at least some Conservative Back Benchers—some of the 20 per cent. who say privately that they now have doubts about rail privatisation—should vote to delay the sale. In the words of a senior Railtrack manager, the sale
is an accident waiting to happen.
I represent an important railway town that has been grotesquely affected by rail privatisation. York has lost some 3,000 out of the 4,700 railway jobs that existed when the Railways Bill was presented to Parliament. Many hon. Members have heard me talk about the loss of rolling stock manufacturing jobs, but jobs have been lost throughout the railway industry. There have been substantial job losses affecting those who maintain the track and infrastructure, the managers of rail services and skilled design engineers.
Despite that, and despite the serious consequences of rail privatisation on the economy of my constituents and the livelihoods of thousands of men and women and their families, I do not have a blinkered ideological view of the railways. I do not believe that public is right and private is wrong. I support partnerships between the public and private sectors.
The Labour party is not squatting on the ground of a private finance initiative. My right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) proposed such a partnership and said that the Ryrie rules on public sector capital investment were an anachronism. When Ministers said that those rules were sacrosanct and


could not be changed, the Labour party argued for change. Eventually, the Government saw the sense of that argument and introduced the private finance initiative.
The way in which the Government are going about rail privatisation will not bring extra investment into the railways; it will simply substitute private sector money for public sector money. The Government hope to raise £1.8 billion from the sale. Presumably, they assume that owners of private capital will want to invest £1.8 billion in railways in Britain. Why do we not encourage them to invest in our railways—in new rolling stock, new signalling systems, new lines, repairing the backlog of maintenance, putting right the repairs that are needed and improving the system and the quality of service to the public?
The £1.8 billion will not be spent on improving the railway system. It will simply buy the railway system that we have at the moment and any investment to improve it will have to be additional to that.
One might ask where that £1.8 billion will go if the rail flotation goes ahead and the money comes in. It will go to the Treasury and it will not be invested in the railways. It will be frittered away on one-off bribes to the electorate at the next general election in a desperate—and, I believe, forlorn—attempt by the Conservative party to garner enough votes to stagger on for another term in order to push through even more desperate privatisations of the Post Office and the few public sector investments and endeavours that remain after four Conservative terms in office.
If the Government really believe what they say and want investment in the railway and an improvement in rail services, they should invite the private sector into partnerships to invest in new schemes and improvements, instead of inviting it simply to take over the existing railway without a penny of the proceeds being spent on improvements and frittering away the resources that will be raised.
Instead of being spent on new infrastructure, the huge private sector investment that the Government are encouraging will be spent on maintaining the status quo. If one tenth of that £1.8 billion had been invested in new rolling stock, it could have paid for the new carriages that Kent commuters require and their representatives in the House have promised, and it would have provided them three years earlier. It would have provided two years' work at the York carriageworks, producing 250 new carriages. Why did the Government not go for private investment to provide a better railway? I have given an example of what could have been achieved with just one tenth of the money. If it had all been put into rolling stock it could have bought 2,500 new carriages or created the west coast main line.
Money can be spent only once. Once it has been invested in the existing railway system it will no longer be available to invest in a new system. Railtrack managers are saying that they are not ready for privatisation. Some of them are saying that safety is being compromised by an early sale. If Conservative Members are concerned about the quality of the railway for the travelling public, they should think before they vote tonight and vote to delay the sell-off.

Mr. Peter Luff: I begin by declaring a lack of interest and an interest. As to the former, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) complained that the Government all too rarely allocate time to debate transport issues in general and railway issues in particular. The hon. Lady should cast her mind back to the various Supply days on the subject of rail privatisation during the course of this Parliament. Consistently in those debates, more Conservative than Labour Members have attended, and Conservative Members have expressed more passion about and interest in the railways. At one stage today, not one Labour Back-Bencher was in the Chamber except the individual who was speaking. That is the answer to the hon. Member for Crewe and Nantwich. The Opposition's lack of real interest in the railways should be registered.
I cast an anxious eye over the hon. Member for Cunninghame, North (Mr. Wilson), who makes a special point of picking up on hon. Members' interests. I declare my own. I have interests in organisations outside the House, but as far as I am aware, none of them has any link with railways. I advise one transport interest, the Chamber of Shipping, and I am extremely proud of that link. I also have shares in the Severn Valley Railway, which give me two third-class tickets each year.
I have shares in Eurotunnel, which I should probably have sold—but some false romantic attachment to the concept of the tunnel meant that I kept them. I used them for the first time for my free tickets to use the shuttle at the Easter weekend. Next time, I speak in the House, I will have shares in Railtrack to declare.
The hon. Member for Hampstead and Highgate (Ms Jackson) tried to get off the hook in respect of the accusation that she had failed to declare her interests when speaking in the debate. It is worth recalling that nine members of Labour's shadow Cabinet are sponsored by transport trade unions.
The hon. Member for Hampstead and Highgate told the House, in an ingenious piece of sophistry, that such support is no longer sponsorship because moneys are paid to constituency Labour parties rather than to Labour Members as individuals. I do not see the distinction. As I read the rules of the House, if a constituency association or party receives more than £500 from any outside body because of an individual hon. Member's candidature, he or she is obliged to declare it. That declaration must be made in exactly the same way as any other interest.

Mr. Peter Bottomley: Is it true also that the Hastings agreement, from which many Opposition Members benefit, pays up to 80 per cent. of election expenses—which can be a sum of up to £3,000 or £4,000? As there are only two legal entities in an election, the agent and the candidate, does that not mean that they receive vast sums of money that are not specified in their declarations?

Mr. Luff: Sensing the mood of the Chair, I will not respond to that comment—except to say that I agree.
I welcome the debate as a good opportunity to get across the truth about the benefits of rail privatisation in general, and of the privatisation of Railtrack in particular. I shall quote several sources to prove the growing tide of realisation that the change will bring real benefits to the


travelling public. There is an increasing belief in the value of rail privatisation and that the Government will achieve their objective of getting the bulk of the railways into private ownership or management before the next general election, and increasing disbelief in Labour's ability to deliver or develop any credible rail policy. The hon. Member for Cunninghame, North must answer that charge when he winds up.
I read the motion in the name of the Leader of the Opposition in amazement. It states that the flotation of Railtrack will
lead to short term profits being put before long term investment.
Do not the Opposition understand that the history of the railway system is that investment in it has been put second, often for reasonable reasons, to all the other many calls on the public purse, and that privatisation will exactly reverse that situation, allowing Railtrack, train operating companies and rolling stock companies to make the investment they deem commercially necessary—and to plan long-term for the first time since nationalisation?
I read with joy the confident words in the Government's amendment, which refers to
a golden opportunity for the railways to gain access to the private finance necessary for investment.
That is the truth about privatisation, and we must confidently trumpet that truth.
The hon. Member for York (Mr. Bayley) spoke at great length, and about as slowly as some west coast main line trains have to go because of the engineering work needed on that line. The hon. Gentleman seems to think that privatisation will achieve only some kind of delayed status quo. He could not be more badly wrong.
As to the so-called fragmentation of the railways in preparation for privatisation, I see no such fragmentation. The network has been reduced to units that are more responsible to customers, which is a good thing. Lord Hanson is busy splitting up his conglomerate, to make it more responsive. He recognises that it is not necessarily a good thing to have a large company trying to do too many things in too many different spheres.
I have the highest regard for the members of the individual management teams that serve my constituency—particularly Roger Macdonald of Thames and Brian Scott of Great Western. Thames has not been privatised yet, but the bids are in, and I believe that the franchise is due to be awarded in November. The increased responsiveness of Thames to the travelling public in preparation for that change is a joy to behold. Some status quo.
I quote from the Evesham Journal of 4 April:
It's all change on Sunday's trains.
Sunday morning trains are to be restored to the Cotswold Line from Easter Sunday, April 7.
Three extra trains each way between Worcester, Oxford and London will be introduced in a two-month earlier start to the summer Sunday timetable.
And more services are planned for the main summer timetable which will be launched in June.
Under the old nationalised, monolithic British Rail that Labour is so keen to protect, we were told for years that it was impossible to run Sunday morning trains, for all kinds of reasons to do with the expense of employing signalling staff on Sunday on what is, sadly, a rather under-invested line in terms of signalling infrastructure.

Now Thames is providing that service, to the great benefit of the travelling public and of tourism in the Vale of Evesham and Worcester.

Mr. Andrew Mackinlay: I have been listening carefully to some of the hon. Gentleman's claptrap, and it occurs to me to ask him how he can utter such remarks now when he put his name to a Transport Select Committee report produced under the late Robert Adley that came out profoundly and unequivocally against the crackpot method of privatisation chosen by the Government. What has changed since the hon. Gentleman, as a new Member of Parliament, put his signature to that thoroughly researched report? Is it promotion?

Mr. Luff: I was foolish to give way to an hon. Member who has not been present for the debate but who made an opportunist intervention to prove to his constituents that he was representing their interests.
The hon. Gentleman is completely wrong. I put my name not to the report by the late Robert Adley but to a different report produced under the chairmanship of my right hon. Friend the Member for Southend, West (Mr. Channon). If the hon. Member for Thurrock (Mr. Mackinlay) will read the succession of speeches that I have made in the Chamber on the issue, he will see that my support for rail privatisation has been unshaken.

Mr. Wilson: rose—

Mr. Luff: I will not give way to the hon. Gentleman, because he made a cheap slur against me the last time we debated rail privatisation. I do not feel inclined to give way to him again.
There are other changes for good on the railway that serves my county and constituency. They include improved timetables and better marketing, because there is for the first time an incentive to increase the number of passengers. There was no such incentive in the cosy old world of nationalised British Rail. The passenger service requirement for Thames currently out for consultation looks extremely encouraging.
As for Great Western, I share the joy that the spirit of Isambard Kingdom Brunel is being resurrected in my part of the country. The staff of Great Western share that pleasure. My right hon. Friend the Secretary of State for Transport, responding to the shadow Cabinet spokesperson, mentioned the share offer being made by Great Western to its staff. I am delighted to tell my right hon. Friend that 60 per cent. of Great Western's staff have put up their own money to buy shares in their train company.
The offer is one third over-subscribed. That means that 51 per cent. of that company is now in the ownership of the management or the employees. Those are the real stakeholders of the modern railway that we are building in this country.

Mr. Wilson: Will the hon. Gentleman give way?

Mr. Luff: No. I have made it clear to the hon. Gentleman that, after last time, the answer is no.
What else has Great Western done? It has achieved—it is an important achievement in itself—a smooth transition to the private sector. None of the passengers


would be aware that the transfer had even happened were it not for the smiling presence of my right hon. Friend the Secretary of State on the footplate of one of the first 125s into Paddington station at the time of the privatisation. The totally seamless transition proved how easy the process is for people who know what they are doing, as the Great Western management team clearly does.
New products have been designed to make the railway more attractive, including business standard and business first. As a family man, I am especially keen on the new family carriage that is being introduced on Saturdays on Great Western trains. Parents with young children will be encouraged to travel, and it is hoped that the children will play with the other children. Activity packs will be provided from the buffet car, there will be a special children's food menu, and the company is considering the possibility of providing an entertainer on the trains.

Mr. Wilson: You should do it.

Mr. Luff: I would not mind volunteering for the job, because I would quite enjoy it. I have always wanted to volunteer to be Santa Claus on the Severn Valley railway, and I will do that one of these years, when I have the time.
I have given some examples of the way in which services are being improved. That is not the status quo of which the hon. Member for York spoke, but a better railway that is being built and promoted. A new Cotswold business manager is being appointed to promote the railway.
Great Western is refurbishing the railway stock. It is undertaking extensive refurbishment, not just putting a coat of paint on the outside of trains, as Opposition Members have sometimes tried to suggest. It is carrying out a substantial upgrade of the 125 stock, and it is considering the possibility of further investments in the fleet, improving service frequencies and increasing the number of trains. I suspect that the only constraint on the managers of Great Western trains will be the availability of 125 units, and they may have to consider more imaginative solutions to meet the demands that will be put upon them as they build a better railway.
I appreciate that the Opposition will want to dismiss what I am saying, because I am a Tory, and I would say it. But it is not just Conservative Members making such comments. Third party endorsement—by which I do not mean the Liberal Democrats—from individuals not directly connected with the railways or the House is growing. For example, Jonathan Prynn in The Times on February 7 this year, wrote:
Impressive local managers, who for decades have laboured under the stifling corporatism of a state monopoly, are suddenly finding themselves liberated … Proper financial accountability is being established for the first time since nationalisation. Performance contracts set up to provide incentives for the train operators, Railtrack and the maintenance firms should deliver improvements in service.
He continues:
Once the flotation
of Railtrack
is a fact, Labour's game is up. Railtrack is the keystone of privatisation, and once in the hands of millions of private investors, the sell-off will become a legal and financial nightmare to

dismantle … If it succeeds, privatisation will deliver higher levels of investment, private/public sector partnership, "stakeholder" employee share ownership and improved public services after 50 years of underperformance—all Labour aims. The case for yet another round of upheaval in an industry that has suffered permanent revolution for the past decade"—
probably for the past century—
would be unsustainable.
I have not always agreed with Andrew Neil, but he wrote an article for the Sunday Times on 11 February. He starts the article with an interesting quotation. He says:
'Call us about rail privatisation,' pleaded BBC television's new Breakfast Extra programme on the day privately owned trains ran on Britain's railway network for the first time in nearly 50 years. 'We want to hear your fears about the future.'
That has been the attitude of the media to privatisation.
I vividly remember receiving telephone calls from radio companies, television companies and newspapers asking for my views on rail privatisation. When I said that I was in favour of it, the phone was virtually put down at the other end. The callers did not want to hear the good news. A BBC programme—I think it was "You and Yours", but I do not want to malign the producers of that programme, and it may have been another one—before any rail service had been privatised, invited listeners to telephone with their complaints about the privatised railway.
I rang and lodged a complaint with the BBC about that gross misrepresentation of the truth about the railways. People were being invited to complain about the nationalised railway, not the privatised railway.
Andrew Neil continues:
Fears? What fears? That the trains might now run on time? That somebody might have cleaned them before passengers boarded? That there is more to eat on board than a stale sandwich? That the buffet might actually be open? That surly staff might be replaced by people who welcome our custom? That clapped-out rolling stock might be replaced by spanking new carriages? That the railways henceforth might not be run entirely for the benefit and convenience of Jimmy Knapp's members or the jobsworths on the board of British Rail?
He concludes his article by saying:
Investment in public transport. New technology. Passenger protection. Penalties for the poor performance of private enterprise. Social subsidies. Even stakeholding. It reads like a new Labour tract. It is part of the absurdity of our party politics—borne of the public's phobia about privatisation—that the government is likely to get no credit for it, while Labour will continue to win cheap cheers by throwing bricks on the lines in an attempt to derail it.
I intend to ensure that Government get some credit for the undoubted success that rail privatisation will be.
How will the reorganisation work in practice? Contrary to suggestions by the hon. Member for York, it is working well. In my region, in addition to the two excellent managers of train operating companies, we have an excellent regional manager of the Great Western sector of Railtrack in Martin Reynolds. The new train operators and Railtrack are working well together, and they have no complaints about each other. That is as it should be. Railtrack is clearly achieving its objectives with the train operating companies, and ensuring that trains run safely and on time.
The great advantage of the new system is that Railtrack will focus on its customers, and train operators will focus on theirs. Privatisation of both halves of that equation can only sharpen that focus. Both halves of the equation have, for the first time since 1948, an incentive to increase


custom. That is what I passionately want, and a nationalised railway will never have an incentive to increase custom.
It was delightful to hear the hon. Member for Eastleigh (Mr. Chidgey) talk about setting targets for increased custom on the newly renationalised railway. Does he really expect us to believe that setting targets generates custom? It does not. Serving the customer well generates custom, and that is done effectively only by a private company. There are now two pressures to increase the use of railways and to replace the cosy, genteel and totally unacceptable decline of the old system.
Sadly, all too often in such debates, the focus is on passengers and we do not discuss the important role of freight traffic on railways. I am proud of the fact that, when I served on the Railways Act 1993 Committee, I secured the first amendment to that piece of legislation when I imposed on the Secretary of State and on the regulator a duty to promote the use of the rail network for goods. The word "goods" was missing from the Government's original clause. Rightly, the Government accepted that amendment, and now the Rail Regulator has a duty to promote the carriage of goods. I am delighted about that.

Mr. Heppell: Will the hon. Gentleman give way?

Mr. Luff: Yes, because the hon. Gentleman has been here for most of the debate.

Mr. Heppell: How much has the carriage of freight increased on the railways since his amendment?

Mr. Luff: That question rather misses the point. Wisconsin Rail, which now owns the freight services of British Rail, is determined to increase the carriage of goods. I am delighted that 90 per cent. of the inward demands for metal of Carnaud Metal Box, a company in my constituency, come by train. That is some 40 to 50-lorryload equivalents each week that do not travel along Worcester's narrow roads. That company tells me that Railtrack continues to give an excellent service, and it is delighted with that facility.
Other companies in the Vale of Evesham are now considering the possibility of putting more freight on to rail. The Vale of Evesham has a crucial role as an importer and exporter of horticultural produce. Two different proposals, one at Honeybourne and one at Blackminster, are currently under active consideration, and the proponents of both schemes tell me that they have excellent relationships with Railtrack and no complaints about the service they receive from it.
Opposition Members have derided the investment record and intentions of Railtrack. That record compares immensely favourably in the immediate past and in the future with anything that the British Railways Board could ever have managed. The list in the interim report for the six months ended 30 September 1995 of major improvements to the network is startling; it includes electrification of Heathrow Express trains; Ashford international station; Birmingham's new £28-million Jewellery line, which provides a significantly enhanced rail service for my constituents from Worcester; the Robin Hood line; and the Leeds north-west electrification.
The list continues. It sets out improvements that have been achieved. Crucially, Railtrack states:

Following flotation we will, for the first time, be able to implement long-range investment programmes, free from the short-term limitations of public sector finance. We look forward, with great enthusiasm, to showing what Railtrack can accomplish in the private sector".

Mr. Hawkins: Does my hon. Friend agree that the sort of investment to which he has referred should reverse especially the historic decline of freight traffic on the railways and correct the problems that he and I and other Members who were members of the Select Committee on Transport heard described by companies such as Castle Cement, which told us that it had to invest in a huge fleet of lorries because nationalised British Rail could not deliver trains on time to pick up loads of cement to take them throughout the country? That is what Railtrack, in a privatised form, will correct.

Mr. Luff: I have nothing to add to my hon. Friend's entirely accurate observation.
It is interesting that the hon. Member for Cunninghame, North (Mr. Wilson) chose to give one of his major statements on his attitude to railways to the Morning Star on 1 February. I hope that the brothers read only the first two thirds of his article, which contained all the traditional sops, such as it
is not railway engineering, but financial engineering.
The hon. Gentleman stated:
The proposed sale of Railtrack is an audacious rip-off on a very grand scale.
It is all there. It is great stuff in the first two thirds of the article.
I hope, however, that the brothers did not read the last third of the article. The hon. Gentleman wrote:
Perhaps too much time was wasted on empty rhetoric about `taking back' when it was never our intention to take back every bit of the railways which had been sold off.
The hon. Gentleman added:
We … never intended to bring the rolling-stock back into public ownership … We won't take back the freight companies if they are sold … Our message to potential franchisees is that we will respect legally binding contracts … but … there will be no coming back to the trough either for more money or derogations in terms of the level of service.
I should hope not. I hope that my right hon. Friend the Secretary of State would not accede to such requests. I am sure that he would not.
It is incredible. The hon. Gentleman criticises the Government for wanting to privatise the railways, but he set out a list of measures that he accepted. As I have said, I hope that the brothers did not read the end of the article. It is fair to say that it contains nothing about Labour's policies. It merely refers to the bits of our policy that Labour accepts.
Later in the article, the hon. Gentleman wrote:
In summary, Labour's policy towards the railways is positive, imaginative and utterly at odds with the present follies.
I do not know how the hon. Gentleman can justify that ridiculous claim.
We all know that these issues are splitting the Labour party from top to bottom. In a way, I feel sorry for the hon. Member for Birmingham, Ladywood (Ms Short), who speaks from the Opposition Front Bench on transport matters. I am very fond of her. I know that she is not fully at home with new Labour. She makes that clear, and I am


grateful to her for doing so. I appreciate her integrity and honesty. Nevertheless, Labour does not have a coherent policy to offer.
I rather enjoyed a piece of imagery which I read in The Sunday Telegraph of 14 April, last Sunday. The authors wrote:
In the film North West Frontier, a fearless Kenneth More"—
I suppose that they mean my right hon. Friend the Secretary of State—
plays an army officer who commands a train half-way across India, battling his way through repeated attacks by be-turbaned rebels, fiendish spies"—
they must be Opposition Members—
and across half-ruined bridges. Against all the odds the train limps to its destination in the final reel and delivers its rather bewildered passengers to safety.
It may feel rather like that on occasions to Ministers in the Department of Transport. I have every confidence, however, that the train, the Government's policy, will reach its destination safely and deliver a much better railway in the process.

Mr. John Heppell: The hon. Member for Worcester (Mr. Luff) gave us a good example of "Alice in Wonderland" adventures. He presented us with selective quotations from newspapers. For every person who wrote to him saying, "I am in favour of privatisation," I could provide the hon. Gentleman with a dozen letters of complaint.
When I travelled down to London by train today, a woman sitting in a seat in front of me was complaining that trains were late because of the various changes that had been made leading up to privatisation. She was complaining that there were more train failures. Some failures are extremely serious.
The hon. Member for Dartford (Mr. Dunn) told us that he was a member of the Committee that considered the channel tunnel rail link. I sat on that Committee for 300 hours, and rather more hours than the hon. Member for Dartford because at the time he was not allowed to take his place in the House for various reasons. I note that the Government Whip seems confused. The hon. Member for Dartford was suspended for a certain period.

Mr. Luff: My hon. Friend the Member for Dartford (Mr. Dunn) was not suspended.

Mr. Heppell: I am sorry. If I have referred to the wrong Member, I shall make my apologies after the debate has come to an end.
I dispute the claim of the hon. Member for Dartford that the channel tunnel rail link was privately financed. More public money is finding its way into the rail link now than when the project was envisaged. The Government said that they would not allow the scheme to go ahead with public money. I forget whether twice or three times the amount of public money is being provided now compared with the sum that was made available originally. To use the rail link as an example of the Government's commitment to railways is probably just about right.
I recall a little story that was recounted by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who is the shadow Secretary of State for the Environment. Many Members will have read about the illegal immigrant who escaped from a train as it went through Kent. He jumped off the train. My hon. Friend said, "He wouldn't have done that in France." The French already have a railway in place of which they can be proud. We still have not completed the legislative process, which must be finalised before we can build our railway on this side of the channel.
I apologise to the Secretary of State because I missed his opening remarks. I apologise also to my hon. Friend the Member for Birmingham, Ladywood (Ms Short) for missing her comments. I had an arrangement to meet some carers of disabled people, and I could not get out of it. I did not want to get out of it, to be honest. I understand that the Secretary of State, as well as the hon. Member for Worcester, talked about the Robin Hood line and what a great achievement it is.
The Secretary of State might want to say, "Yes, I have built a railway," and will not go on to say, "Buddy, can you spare me a dime?" I remember, however, why the Robin Hood line was built. I am grateful to the Government for giving support to the line. Effectively, the Government were pretty much railroaded into the project. I remember the decision being taken that the line should go ahead. It was an historic decision.
I should explain that, for years, I had sat on Nottinghamshire county council and had seen road schemes costing £10 million, £15 million and £20 million being nodded through. It was the council's policy to nod through road schemes. When it came to anything to do with railways, the response was, "No. That is a matter for British Rail. The council cannot possibly put any money into railways." With the Robin Hood line, however, the council decided that for the first time it would put money into a new railway. It put aside £6 million and went on to persuade the district councils to make money available so that stations could be built. The county council tried to get money from the private sector. It went also to the Government and to Europe. The Secretary of State would probably agree that the Robin Hood line was the initiative of Nottinghamshire county council. A tunnel was opened, for example.
Privatisation of the Robin Hood line is scuppered. Patronage was double what was expected. Even so, there were difficulties because of privatisation. Access charges increased, and the cost of rolling stock almost doubled. Do not quote the Robin Hood line as an example of how Railtrack privatisation is working.
Perhaps I have raised secondary issues. I did not intend to speak in the debate—

Mr. Dicks: The hon. Gentleman always says that.

Mr. Heppell: No, I do not always make that comment. I usually say, "I shall be brief." I am told, however, that I never am. I did not say that today.
I decided to speak, however, because I was a member of the Committee that considered the Railways Bill, along with the hon. Member for Worcester. I remember the White Paper of 1992. I remember also the full discussion that took place in Committee. We discussed the relationship between British Rail and the regulator, the


relationship between the regulator and the franchising director and the relationship between the franchising director and the train operating companies. The hon. Member for Worcester nods and laughs. I remember seeing a diagram—I am sure that I have mentioned this before—of all the different lines of communication criss-crossing a page to show how things were supposed to operate. It was very confusing. I could not understand it, and I worked for the railways before I came here.
As I said, we discussed the consequences of investment and the effect of privatisation on fares and on discounted fares. We had long discussions on safety, and I shall come back to that in a while. We also discussed competition. We do not seem to discuss competition any more. I remember when the former Minister of State, Department of Transport, the right hon. Member for Kettering (Mr. Freeman), had to get up in Committee and, to the laughs and derision of Labour Members, admit that for a number of years there would be no competition between the train operating companies, which would be running on the same lines and bidding against each other, so that people would take up the franchises. Competition was shoved to one side. Before that, the assertion was that this was not some Orwellian concept. It was not that private is good and public is bad. It was to inject competition into the railway industry. But out it went at a stroke. If somebody can tell me where competition comes in with regard to Railtrack, I shall happily listen.
My main point is that we discussed all those aspects of privatisation in depth, and I feel that we did a good job, even with the Government's limited information that was provided at the time. Never at any time were we told that Railtrack would be privatised. It was the exact opposite. The Government told us that they would privatise the train operating companies and that there might be 13 stations that they would asset-strip and sell off. We complained about that, but we were not told that Railtrack would be sold.
I do not like it, but the Government have a right to pursue a privatisation policy. They are wrong, and the way in which they are privatising the railways is laughable. No one, except the new accountants who have been brought in, believes that privatisation can really work. I see Conservative Members shaking their heads, but I bet that they cannot find anybody—someone whom I would consider to be a railway person—who is not buying in to make a cheap profit and who believes that the system will work.
I emphasise that we were not told about the Railtrack privatisation. I have two quotations, the first of which is from the then Secretary of State for Transport, the right hon. Member for South Norfolk (Mr. MacGregor), who did not have much involvement in Committee. He said:
Outright privatisation of … the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that."—[Official Report, 2 February 1993; Vol. 218, c. 160.]
In other words, he was saying that the railway would not be privatised as long as we are paying subsidy.
In Committee, the then Minister of State, Department of Transport said:
Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]
Conservative Members seem to have identified a new definition of "foreseeable future". I suppose that we should have heard last week that Labour would not win

South-East Staffordshire in the foreseeable future. I think that before the local council elections on 2 May we shall hear that there will be no Labour gains in the foreseeable future. The best one will be when the Government tell us that there will not be a Labour Government in the foreseeable future, because now I understand exactly what that means.
I am not asking the Government to abandon their ideas about privatisation, but at least we used to discuss it. We did not just have one day to debate it in the Chamber; we sat for hours and hours and went through it in detail. No one can tell me that a publicly owned Railtrack, which owns the stations, bridges, tracks, lines and all the other bits that will be privatised, is the same as a privatised Railtrack, with all the bridges, land and so on. It seems to me that when Railtrack is privatised, there will be two possible sources of income. The first will be access charges. Where will the money come from? The train operating companies. Where will the train operating companies get the money from? Government subsidy. Is not that the way in which access charges work? I know that it is the way in which they are supposed to work.
Just this week, the Secretary of State for Social Security told us that there is no such thing as poverty. If he believes that, he should visit my constituency, which has the eighth highest level of unemployment in the whole of Britain; higher even than any Scottish or Welsh constituency. He would see real poverty there. Perhaps the Conservatives still believe in the trickle-down theory. In this case, it trickles down from the taxpayer, through the train operating companies, into Railtrack and then into shareholders' pockets. Nobody can tell me that that is justified.
There is another way in which Railtrack can raise finance—asset stripping.

Mr. Gary Streeter: indicated dissent.

Mr. Heppell: The hon. Gentleman shakes his head. Initially, the proposals were that 13 stations would be sold off to the private sector and the rest would stay with Railtrack in the public sector. In Committee, we said that that was asset stripping. Individual private companies that took over those stations would be able to sell off the land around stations and make a healthy profit. Now it is worse, because it is possible to asset-strip not just 13 stations, but the lot.
I am worried not only about asset stripping but about the consequences for the future, because I have seen the asset stripping of railway lines before, after Beeching. I shall tell the House what happened. The land that was bought up and used for development blocked off possible future transport links into the city of Nottingham and many other cities across the country. Once land has been built on, one cannot put a railway through it. That is not just asset stripping, but tying up land for the future.
When Conservative Members come to their senses—sorry, I am wrong, because I am fairly sure that they will not. When we have a Labour Government, who decide that we really do want to ensure that the railways expand, with more passengers and more freight, we shall not block off the corridors to allow that expansion by asset-stripping under the present proposals. That is the only way in which Railtrack can raise money. The Government are talking


about the sale of the century. They are to give profits to shareholders who do not even own the shares yet. They will be guaranteed £69 million in the autumn—"Buy your shares and get your profit."
How can anybody tell me that that is a sensible proposition, that taxpayers' money should be given to people in that way? I could understand it in some respects if the Government's dogma worked, and if privatisation allowed them to pull back on the subsidy to be given to the railways, but the reverse is true. One ends up paying more subsidy, but getting a worse service than before.
I shall touch quickly on safety. Earlier, I heard an hon. Member—I think that it was the hon. Member for Worcester, but perhaps it was the hon. Member for Dartford—say that there was no reason—I am getting a signal from the Government Whips. I am not too sure whether I am supposed to take notice of them, but now I am getting a signal from my own Whip.
In Committee, I looked at the brief produced by the Health and Safety Executive. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) is right: there were 38 recommendations suggesting ways in which rail safety could not be improved, but could stay at the same level. The recent railway safety case lists 10 actions, many involving substantial cost, which would not make the railways safer but would attempt to make them as safe as they are now.
There is no doubt that the cobweb of confusion that will be created by the new arrangements will lead to more accidents. I am a former railwayman, and, believe me, the "fail-safe" concept was drummed into us. Nowadays I just read the newspapers, but I am certain that the accidents that happen currently did not happen as often in my time. I read about fuel tanks and traction motors dropping off trains; apparently, there are fires on trains and no one can get off because the access has not been worked out. I read about axles snapping. Before that recent instance, when did an axle last snap on a British Rail train? We would have to go back hundreds of years—to the time of Isambard Kingdom Brunel, and the man in a top hat sitting on the footplate. It may seem funny, but I believe that there is something fundamentally and radically wrong with the current safety arrangements.
If Conservative Members do not agree to a review, or at least a discussion in a committee, they have only one option if they are to save the railways: they must vote Labour.

Mr. Stephen Day: I apologise for not being present at the beginning of the debate; I was serving on the Select Committee on Social Security.
First, let me deal with certain issues on behalf of the Parliamentary Advisory Council for Transport Safety, of which I have the honour to be joint chairman. For about two years the council has had a rail working party, which has made a number of recommendations and observations about rail safety. I am sure that members of that working party, who have a keen interest in—and vast experience of—both the rail industry and the academic aspect of railway matters, would not want me to say anything on their behalf that could be construed as scaremongering.

The advisory council does not take such an approach to rail safety issues; indeed, it takes a responsible and positive approach to transport safety issues in general.
Hon. Members have made some rather over-excited comments about safety. 1 hope that what I shall say on behalf of the advisory council will not be viewed in that light; I intend to offer some positive suggestions. This is nothing new for the council. It has nothing to do with the fact that we are discussing the privatisation of Railtrack, or with the privatisation of the railways. As my hon. Friend the Minister will know, the council has a long history of working with, and campaigning to change the mind of, the Department of Transport.
My hon. Friend the Minister will also know that a number of organisations are currently responsible for safety in the new structure. Each train operating company must submit a safety case to be approved by Railtrack; Railtrack's safety case is approved by the Health and Safety Executive, which includes the railway inspectorate. Although the office of the rail regulator has no safety brief, it can act as independent arbitrator in the event of disputes between Railtrack and train operators. I understand that those arrangements were proposed in an HSE report entitled "Ensuring Safety on Britain's Railways", published in 1993—before the Government's decision to privatise Railtrack.
I want to raise two aspects of safety management, which merit more attention than some of the scaremongering that we heard earlier. The first—about which both the parliamentary advisory council and I are concerned—relates to communication and liaison. The council believes that we must ensure that safety lessons that have been learnt can be easily transferred from one company to another. The previous structure of vertical national ownership had the weakness of inflexibility; the new structure, based on competing units, does not naturally lead to the sharing of knowledge and solutions.
Secondly, much good work has been done on safety in recent years. Both staff and resources have been allocated to improve the safety of both passengers and work force. Will my hon. Friend the Minister consider reviewing the 1993 HSE recommendations?
Let me give my own views on the whole question of rail privatisation. I do not deny that I have expressed reservations about aspects of it in the past; indeed, I still think that it would have been better to "regionalise" the railways and sell them as a separate unit. Despite those reservations, however, I will not accept the invitation issued by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody).
When the House has voted on rail privatisation issues in the past, not only have I stood on my feet to express the view that I have expressed again tonight, I have on occasions voted with the Opposition. Indeed, I remember well supporting the so-called wrecking amendment to allow BR to bid for franchise. That does not alter the fact that, at that stage, the House was debating legislation, amendments were before it and the debate would have had some practical effect. Tonight, we are not dealing with the Opposition trying to bring influence to bear on the Government's policy or their attitude towards the nature of rail privatisation. We have heard not helpful suggestions but hostility to the concept of privatisation in any form. That is where I differ from Opposition Members.


I am also aware that this Opposition debate has nothing to do with the issue itself and is all about something else. It is about trying to persuade Conservative Members such as myself who have expressed reservations in the past to join the Opposition in the Lobby in the hope that they can inflict an embarrassing defeat on the Government that would have no practical effect whatever. I am not going to be tempted.
I have every respect for the Opposition. Indeed, it is their duty on every occasion to try to embarrass the Government. But I am sorry, when I speak on rail privatisation in this Chamber and cast my votes on it, I want them to be cast on the issue. I am not here to help the Opposition do their job in merely trying to embarrass the Government. People in the great wide world should understand the difference between when we debate legislation and when the Opposition are merely trying to play politics with such an important issue. There is no way in which I shall support the Opposition this evening.
I hope that Opposition Members will stop accusing the Government of being purely dogmatic in their approach to rail privatisation. I have views on the alternative ways in which rail privatisation could have been brought about, but I am in no doubt that some form of privatisation is necessary for British Rail. That is fairly obvious to anybody who has travelled on it over the years. They recognise that improvements must flow from privatisation, as they have from the range of privatisations pursued by the Government.
The Opposition are not interested in what sort of privatisation we propose—they would oppose privatisation of British Rail whatever its nature. Labour talks about Conservative Members approaching the matter on a purely ideological basis, but Labour is the ideological party in this respect. The Opposition have opposed every privatisation. Privatisation in general has been a great success for the people of this country, and I know that the only way in which that success and its benefits can be maintained is to ensure that the party that pretends that it will not overturn privatisations and that it has accepted the change in the culture does not take office. In its heart of hearts, as it has proved tonight, Labour is still bitter about everything that privatisation represents and against the private sector in general. I shall do all in my power to ensure that it never takes office.

Mr. Andrew Mackinlay: I listened carefully to what the hon. Member for Cheadle (Mr. Day) said, and I agree with him in one respect. It should be said in the Chamber that, like him, I was serving on a Select Committee this afternoon, along with my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). Time and again, the people who run this House—the Leader of the House and perhaps others—arrange transport debates or Opposition Supply days when hon. Members who want to participate and who demonstrably have an interest in participating are in Committee, and hon. Members who perhaps do not have a bona fide excuse for not participating do not attend. Parliament is serving the fare-paying public badly when such an important debate is so poorly attended.
I hope that the party managers will in future get their act together so that members of the Transport Select Committee can attend such transport debates and hear the

arguments advanced by my hon. Friend the Member for Birmingham, Ladywood (Ms Short) and by the Secretary of State. We were denied that opportunity today because of the way in which the people who manage the House have acted.
Having got that off my chest, I want to say that a lot of rubbish was spoken by some hon. Members, who diverted this important debate on rail privatisation into avenues relating to trade union sponsorship and so on. Some Conservative Members receive thousands of pounds from trade unions—quite legitimately—for acting as consultants, but that is not deemed to be inappropriate. That is a matter of fact—one such Member is in the Chamber at present.
There is some agreement among the political parties about the parlous state of our railways. We agree that the railways are clapped out, that staff are demotivated, that we have a shortage of staff, that we have high fares and that the fare-paying public are sick and tired of our deteriorating rail transport system. The public want remedies, and that is where the parties differ. The fare-paying public believe that the parlous state of the railways is a result of the repeated starvation of resources by successive Governments, but particularly by the present Government who have been in power for a long time. They know that our railways are clapped out because of the failure of the Conservative Government to provide proper funding. That is the real problem.
The Government are now trying to extricate themselves from their embarrassment and kick into touch the problem by flogging off this important infrastructure asset in such a way that the damage will not occur in the time in office of the current occupants of the Treasury Bench. The public want investment in our railways, and they want a modernisation of our railways. They understand that the fragmented scheme that the Government are proposing is a prescription for disaster, and will bring us to the brink of a second Beeching. If it goes ahead, the result will be higher fares, a diminished service and the closure of intermediate stations—particularly as the real estate is flogged off by the new owners of Railtrack. There will be a different map of our railway network a decade from now because of the actions of the Government. There is an opportunity tonight for Conservative Members—those who are in the Chamber—to stop the Government going down this foolish path. I hope that, even at this stage, they will join us in the Lobby and put the freeze on this crackpot course.
The hon. Member for Cheadle said that he thought the proposed method of privatisation was foolish, as did the late Robert Adley. The scheme was not designed that way, however. The previous Secretary of State for Transport said that the Government were not going to privatise Railtrack for a long time. But the Government are running out of resources, they are running out of a legislative programme, and there have been changes on the Treasury Bench. The Government should have disposed of Railtrack in the way proposed by both the late Robert Adley and the hon. Member for Cheadle—if they had to privatise, they should have sold off the track and the trains on a regional basis. But that plan was abandoned by earlier Tory Secretaries of State, and the Government are now compounding their errors by selling off this important infrastructure because it is valuable real estate.


My constituents have suffered from the franchising process already. They have seen the halting of the London-Tilbury-Southend line franchise—the misery line—at the 11th minute of the 11th hour, and we do not now know what is going to happen. One thing revealed by the aborted LTS franchise was that the passenger service requirement was not worth the paper it was written on. When Enterprise Rail was creating its shadow franchise in the build-up to the sell-off, we were told that there would be four trains an hour at peak hours. At first glance, one would think that that broadly matches the present situation. But if one cross-examines and probes that statement, one finds that it means two trains one way and two trains the other way—there is no guarantee that the existing inadequate service will be maintained following rail privatisation. We have in a sense looked into the abyss, and we know that what happened to the LTS line is likely to happen elsewhere.
The hon. Member for Dartford (Mr. Dunn), who is not in his place, spoke a lot of humbug about trade unions. He also raised the question of safety. He alleged that Opposition Members were scaremongering. On my London-Tilbury-Southend line I already have a number of important privatised junctions to various industries along the river frontage. Lines go off at junctions with signal boxes to an Esso plant, car freight depots and Vandenburgh and Jurgens. I am concerned because we are already suffering from the fragmentation of control and the training and employment of staff, to which my hon. Friend the Member for Cunninghame, North (Mr. Wilson) has referred in interventions.
On 10 April an incident occurred on a private track off the LTS line in my constituency. A freight train was going in or out of a private yard and there was an incident on the crossing. The private train, going into a private yard, was left sticking out on the main line and the fare-paying public on the LTS line were left stuck, not in stations, but on trains for two and a half hours because the privatised signalman, or his crossing, was not operating properly. There was absolute chaos and a potentially enormous hazard was created. That scenario will be compounded as track and operators are privatised. We will find that the frustration of people who pay fares will increase because their trains will not run. Various organisations will blame each other and argue about who should remedy the situation. I believe that dangers will be created as a result of the fragmentation of control.
I am about to conclude, but I am grateful to see that some more Tory Members have come into the Chamber. On the last occasion when I spoke, I referred to all the stations on the south-west lines. I shall not go through the litany again. In a few years' time when their constituents are complaining, Tory Members of Parliament here tonight, if they are still Members of Parliament, will put the violin music on in the background and say how dreadful it is that their stations have closed, there are no trains at weekends, fares have gone up, and so much has changed on the railway network. Some branch lines will have closed. Tory Members will put on a phoney act of weeping and gnashing of teeth saying that it was not them. We shall remind them that it was they who went into the Division Lobby prepared to sell off this public asset to the disadvantage of their constituents. If and when it happens, they will be to blame.
I hope that when my right hon. and hon. Friends get on the Treasury Bench, they will be able to minimise the impact of this foolish privatisation and, with some boldness, bring back into public control, if not public ownership, our railway network.

Mr. Brian Wilson: We have heard some valuable speeches from Labour Members. I particularly recommend that Conservative Members, if they are capable of listening and learning, listen with respect to my hon. Friend the Member for Nottingham, East (Mr. Heppell), who spoke about safety. It takes someone who has worked on the railways, as he has, to understand the complexities and the folly of what is being done and to set aside on the basis of that reality the trite reassurances that Tories offer to themselves. They are playing with fire in this privatisation.
Just as important, as I have said throughout this process, and just as wrong as the privatisation, is the process of fragmentation on the railways. As my hon. Friend the Member for Thurrock (Mr. Mackinlay) said, the Government can take no comfort from anything that the Health and Safety Executive has said at any stage in that process. It has said specifically that an inherently less safe, more dangerous railway is being created. It has made recommendations to counter the fragmentation process. If the Government are prepared to put in place an inherently less safe railway network, what kind of responsibility to society does that show? Steps of enormous complexity have had to be taken to guard against what the Government are doing.
Let us get rid of one of the international canards and be absolutely clear that no Government or country has embarked on anything remotely resembling the process of rail fragmentation in which the Government are now engaged. I would suggest that no other country has done that not for ideological reasons but for safety reasons; other countries have realised and accepted that a fragmented railway system is inherently less safe.
I shall quickly refer to the speech of my hon. Friend the Member for Linlithgow (Mr. Dalyell), because I would be in terrible trouble if I did not. I have great respect for what he said and I share an interest in the subject. I call on the Minister to address the important concerns about the Forth bridge, to which my hon. Friend referred today and which he has pursued tenaciously over many months.
I refer to the speeches of Conservative Members. Today I thought—not for the first time in this long process of debating rail privatisation—would that Robert Adley were with us at this hour. I have noticed the empty Government Benches. I refer to the Tory Members who signed the amendments that Robert Adley drew up, which included measures to give British Rail the right to bid for franchises. Where are they tonight? They have escaped to their tents with their knighthoods—and I hope also with their consciences. They signed the amendments and they knew the wrongness of what was being done. As soon as the leadership and the courage of that one Tory Member disappeared—for the most tragic reasons—they deserted the cause to which they lent their names.

Mr. Day: I hope that the hon. Gentleman is not referring to me because on that occasion I voted with the Labour party on the amendments in relation to British Rail being allowed to bid.

Mr. Wilson: I am glad to hear that the hon. Gentleman voted for that— and I am not sure whether he was one of the Conservative Members who signed the amendments. I remember very well that the last time I met Robert Adley in this place was in the Members Lobby. He told me with great pride that he had six Tory names on the amendments. I asked him whether they included the right to bid and he said, "Of course, that is the one that matters. That is the one that will scupper the whole thing."
Six Tory Members put their names to the amendments—and they have disappeared like snow on a dyke or cowards off a battlefield. That amendment was won in this place and the Ministers sitting here tonight have reneged on it shamelessly. I am afraid that the hon. Gentleman puts himself in the same category as other Conservative Members if he votes for the wrongdoing that is continuing and that is in direct contradiction to the amendments that he claims he voted for in the past.
We have heard a lot of fantasy politics tonight—about all, about the wondrous gifts that will be bestowed on the railways through this fantastic process of fragmentation and privatisation. There is absolutely no evidence in that regard—it is fantasy politics, it is a wish list of all the things that the companies will do. All we are asking tonight is that the process be slowed down so that what has happened thus far can be reviewed.
Of course, to Conservative Members, we are asking for the impossible. They are not interested in the arguments about what has happened so far. They are not interested in the implications for the taxpayer or for the passengers. They are interested only in rushing this measure through before a general election as part of the general scorched earth policy. Asking them to slow down is asking them to abandon the policy because they know that they will not be here in office to live with the consequences.
That is part of the immorality of what has been done. There is no interest in the implications, because other people, other politicians and other generations will have to clean up the mess that will be created. They are politicians without responsibility for they are legislating for a period when they will not be in office to live with the consequences.

Mr. Pike: Although what my hon. Friend says is true, will not the proceeds of privatisation have been squandered and lost for ever more?

Mr. Wilson: My hon. Friend is right. Many of the assets, and the people, will have been squandered as part of this reckless wrecking process. I have said before that people who believe in Tory rebellions probably also believe in the tooth fairy, but I am told that some of the Tories who might have rebelled give as a reason, strangely enough, for not voting with us tonight the South-East Staffordshire by-election. Tory Members come up to us quietly and say, "We would love to, but it is too dangerous now to vote against the Government because it could bring the whole pack of cards tumbling down." That is the new line of rationalisation. That is one way of interpreting the lesson of South-East Staffordshire; but if they had started re-examining policies such as this, they would not have been in the mess they were in there.
I listened to the right hon. Member for Peterborough (Dr. Mawhinney) this morning—before he was carried off by the men in white coats—reacting to questions on the

"Today" programme. He was asked in the mildest of manners by Miss Sue MacGregor what would be the equivalent of the dramatic action before the last general election when Thatcher was disposed of and the poll tax dropped. He chose to concentrate on the parallel—I can understand his mind being active on this—between the fate of Baroness Thatcher and the current position of the Prime Minister. He might have concentrated on what legislative measure should be dropped before the next general election. If he had done, rail privatisation might have occurred to him, because the one is as unpopular as the other.
Instead of the dreams of Conservative Members about top-hatted managers travelling on footplates—at one point we had refreshment cars going up and down the engines—let us consider what is really happening. The smugness, complacency, ignorance and contempt that they display in the name of privatisation are beyond belief. There is a private railway industry in Britain; it is called manufacturing. There are hundreds of splendid privately owned and operated companies that work in the railway industry—and good luck to every one of them. Many are doing well in the export field, which is what is saving them.
What have the Government done in the name of privatisation to private manufacturing industry in the railways? Some 8,000 jobs have gone. The great railway town of York will never build another train. The Government have ignored all the warnings about the blight on investment in the railways. They brushed it aside and said that it would never happen. For 160 years, Britain led the world and built trains for the world. In every one of those years, Britain built trains for our national railway network. Since the lunatics were put in charge of the asylum, there have been three solid years without a single train being operated, and the existing private railway industry—the manufacturing industry—is bleeding to death. That is their first achievement in the name of privatisation.
What about the record on employment so far? Eight thousand jobs gone in railway manufacturing. They do not care about that. Jobs have started to go at South West Trains. They will start to go in every franchise. That is not because the railways are overmanned—there have been massive efficiency gains in the past few years, especially through the organising for quality programme. It is not because those people are not needed for a safe, good railway or to deliver a service to the disabled and to elderly passengers. It is simply because the franchisees have entered into contracts from which they have to work backwards in financial terms. They cannot control the costs of access charges or of leasing trains. The only variable cost worth talking about is the cost of labour. To make it pay, they have to get rid of people. That has implications for service and safety and is the inexorable logic of this privatisation.

Mr. Dover: Does the hon. Gentleman accept that, in any industry, productivity is the name of the game? If management, particularly new management, can get more out of the work force, so much the better.

Mr. Wilson: It is an interesting philosophy, and productivity is the name of our game, but—this is where the two sides of the House differ—it is not the name of the only game. It is certainly not the name of the only


game when one is delivering a public service. A safe and efficient public service is also part of the game, but that is neglected in all this privatisation because, within seven years, the companies have to squeeze their profits out of franchises that they have entered into on the basis of fixed figures. I would expect the hon. Gentleman to understand that distinction.
We are told that hundreds of companies have been busting a gut to get hold of railway franchises. Look at the London-Tilbury-Southend line fiasco—the Government did not do very well there, did they? What about the Resurgence Railways fiasco, when Ministers were prepared to give away Great Western to a failed double-glazing salesman? We have heard several hon. Members say what a wonderful job the Great Western management are doing under the privatised franchise. As the Government are well aware, the management owe to the Opposition the fact that they are doing the job at all. Their bid had been chucked out. The franchise was going to be given to the double-glazing salesman and the vice-chairman of the Huntingdon Conservative association, until the Opposition managed to establish, by the simple process of looking at the records at Companies House, what a shower of shysters they were. It was only at that point that the Resurgence Railways bid was thrown out and Great Western management brought back in.
Stagecoach appeared on the scene as a white knight, with its 22 references to the Monopolies and Mergers Commission behind it. On Network SouthCentral, it was the Compagnie Generale des Eaux—described in the most flattering terms by a French judge as one of the two most corrupt companies in France. Doubtless, as we meet, Ministers are desperately trying to attract the interest of the other.
The east coast main line has been handed over to James Sherwood within weeks of his saying that the franchising formula was a formula for a no-investment railway. He went to the only place in the country where £1 billion of public money has been invested in the railway and was given that franchise instead. That meets his criteria—he does not have to invest—and it meets the Tories' criteria, as they have managed to give away the most valuable piece of the British Rail network.
The hon. Member for Keighley (Mr. Waller) had something important to boast about. He said that, within seven years, the east coast main line would be a service that no longer required public money. He must be suffering from a serious loss of short-term memory because, two years ago, the east coast main line not only did not require public money but was such a profitable piece of railway because of the public money that had gone into it that it cross-subsidised the remainder of the inter-city network. That is what we believe in. Where there is investment, there is profit and east can subsidise west, day can subsidise night and urban can subsidise rural services. That is the way to run a railway network.
If it is Tory management of the economy to take out of the network the part that has had the bulk of public investment in the past 10 years and then wave a flag saying that in seven years' time it will not need a subsidy, no wonder the Government are in a dire plight.
We heard a miraculous statement about South Eastern Trains today—there will be investment in trains for the line. That is great. The trains are 50 years old, so let us

hope that there is going to be some investment. I wonder why, last week, when the Government announced a parallel contract that has been awarded for Network SouthCentral, which has exactly the same conditions and age of rolling stock, there was no mention of any new trains. Where are the Members of Parliament who represent that area? A couple of the usual suspects have been waving their flags today and welcoming the prospect of new trains for South Eastern Trains, but where are the Tory Members for the Network SouthCentral area? Their commuters have been told that, because of the glories of the franchising system, there will not be any new trains for another seven years.
I can tell the hon. Member for Dartford (Mr. Dunn) and whoever else was cheerleading today that they should not count their chickens. If I were told by any of the jokers on the Government Front Bench that there would be new trains in three years' time, when even the most simple arithmetic told me that that is two years the other side of a general election, I would not put that assurance into the election address just yet, particularly because that contract has not yet been awarded. That is the difference—the one that has been awarded contains no mention of new trains for Network SouthCentral, whereas the one that has not been awarded represents another promise to be added to the wish list.
I could go on about the details of franchising, but I am a mere artisan; let us leave it to the master, to the man who has recognised the real potential of franchising, the saviour of the Tory party who represents the symbiotic relationship—the back scratching—between the Tories and Stagecoach. I see that Mrs. Gloag is now the second richest lady in the country; perhaps she will now be applying for the position and the money of the richest.
Probably unaware that he was being reported addressing what is jokingly called the British Venture Capital Association, Mr. Brian Souter, the chairman of Stagecoach, got on to the subject of rail privatisation. His comments combine the issue of franchises with the question of what kind of deal the taxpayer is getting. In his after-dinner speech to the British Venture Capital Association, Mr. Souter spelt it out in terms with which I would not begin to compete. He is reported as saying:
There was a £4bn integrated rail business which had £800m of government subsidy. Now there is a desegregated £9.5bn rail business with £1.8bn of subsidy. While everybody else was taxing themselves about the structure of privatisation, we stuck with a very simple question: what happened to the £1 billion?
According to the report, there was "approving laughter" from the assembled entrepreneurs.
I can tell the House what happened to the £1 billion. It is coming out of the Treasury, not to create a single extra service or to run an extra train£far less to order a new one£but to be the extra raft on which the whole superstructure of privatisation is to be floated. Two years ago, £800 million of taxpayers' money was going into the railways; now £1.8 billion is going into the railways, not for an extra service or an extra train but solely to sustain the profits and superstructure of privatisation. That is what it is all about.
Let us now deal with investment. We hear investment spoken of as if it were something new and as if it had never been made in the railways before. Let us consider the evidence of Richard Hope, a well-known authority in the railway industry. Railtrack came out with a statement


about a £10 billion—£1 billion a year—investment programme, on which Richard Hope's comment was "Big deal!" Railtrack's own written evidence to the Select Committee on Transport on 2 February 1995 says that
annual steady state maintenance should be £800m which"—
these are Railtrack's words—
'does not provide for any catching up of outstanding work' … Renewals are given as £570m … so steady state spending on the rail infrastructure should be not less than £1370m.
To maintain the current condition of the railway requires £1,370 million a year. Despite the ballyhoo, Railtrack is offering £1 billion a year.
The proof is in the pudding. If Railtrack were offering some new investment instead of a reduction, it would be talking about electrification schemes and Tory Members would be able to return happily to their constituencies, whether in Blackpool, Aberdeen or any of the other places where there have been good, credible campaigns for rail electrification. However, unless a Tory Member lives within a three-mile radius of Heathrow, he cannot promise his constituents electrification because there will not be any for at least the next 10 years. The word "electrification" does not appear in Railtrack's 10-year investment plan. That is the reality of its investment programme.
For all that the Tories despise the public sector, I know that, in my constituency and in every part of the country to which I travel where electrification has taken place, it has been of immense benefit to the routes and communities that have it. It was delivered by the public sector, but we are now told that, for the next 10 years, there is to be no electrification by the private sector. To be parochial for a moment, I hope that the two Tory Members from the north-east of Scotland who won their seats by promising that the only way to deliver electrification to the north-east of Scotland was through privatisation will lose their seats, because they now have to say that the only way to guarantee that there will be no electrification is through privatisation. What they said was the reverse of the truth.

Sir Roger Moate: The hon. Gentleman's problem is that most people remember that, for all its good intentions and commitments, the last Labour Government reduced investment in the railways not for one or two years, but year after year. The hon. Gentleman derides our investment plans through the private sector, but will he confirm what commitment a Labour Government would make to investing in the railways? How much would a Labour Government invest in a public railway system?

Mr. Wilson: Why look in the crystal ball when one can read the book? Two years ago, investment in the railways was at its lowest level in real terms since nationalisation in 1948. I can point to a record of investment, but the Tories can point only to dreams of investment. They now have an investment bible which, by their own admission, will yield no new electrification schemes around the country.
I shall run through some of the flotation arguments. The hon. Member for Eastleigh (Mr. Chidgey) has already drawn attention to a grubby little document that tells every unsolicited recipient of it that

Railtrack is not an operator of trains … It is essentially a property company and the land that Railtrack will own could be regarded as one of the most valuable pieces of real estate in the UK".
That is how the sale of Railtrack is being marketed. I ask the Secretary of State what action the Government have taken against one of their official share shops for describing Railtrack as a property speculation company. If he intends to pursue it over that matter, he can also inform it that, when Labour comes to power, we will quickly take regulatory action to ensure that every penny in property proceeds from the railways is reinvested in the railways, as occurred in the past. The Tories are yet again selling their product in a manner that is in breach of the Trade Descriptions Act 1968.
I refer briefly to the £69 million of taxpayers' money. We must understand what is going on. I thought that, according to the theory of capital, investment is about risk; yet taxpayers' money is being recycled as Railtrack's profit. It will be sprinkled like confetti among Railtrack's shareholders£not one of whom was a shareholder when the money was raised. Where is the morality in that and where is the risk?
Some £69 million will be given as a bribe to potential shareholders. It could have paid for major electrification projects such as the Glasgow, Queen Street to Edinburgh line or the north trans-Pennine Leeds to Manchester and Liverpool line. It could have been used to replace the remaining Kent coast rolling stock. There are no ifs, buts or talk about in three years' time: that is what the £69 million could have achieved. Will Tory Members of Parliament representing Kent constituencies take that message to their constituents instead of the bogus one that they were peddling?
I turn to the last of the great incentives and the letter from Mr. John Welsby. I would love to scrutinise it in great detail, but time is pressing. The Tories' deceit is again writ large: if the letter had not been leaked, we would never have known that the chairman of British Rail had written to the permanent secretary at the Department of Transport, with copies to Mr. Roger Salmon and Mr. Robert Horton, saying that the Railtrack prospectus contains several fundamental untruths. The prospectus is seriously misleading. It fails to inform potential investors of Railtrack's performance as manager of the rail infrastructure network and it fails to provide them with "material information", in the words of Mr. Welsby.
Investors have not been told the truth because Ministers will do anything to carry through the privatisation, irrespective of the taxpayer, the travelling public, of decency and of promises made to the House. That is what the Tories are about. They may win the vote tonight and privatise the rail industry, but they will pay the electoral price every day until the general election.

The Minister for Railways and Roads (Mr. John Watts): Those who rely on leaked documents are unlikely to get to the whole truth. The letter from which the hon. Member for Cunninghame, North (Mr. Wilson) was quoting was written in response to a request to the British Railways Board to comment on the first draft of the prospectus.
One of the points that Mr. Welsby made in the letter was that there should be a clearer exposition of the role and powers of the regulator. The letter from the Rail


Regulator containing the statement that is now printed in the pathfinder prospectus was sent by Mr. Swift the day after Mr. Welsby's letter. As the reply from the Permanent Secretary indicates, all the concerns expressed by British Rail have been taken fully into account in the final version of the prospectus, which the hon. Member for Birmingham, Ladywood (Ms Short) has not seen because it has not yet been published.

Ms Short: Is this one misleading?

Mr. Watts: That is the pathfinder prospectus and I am not saying that it is misleading. The hon. Lady has difficulty in putting the right words in her own mouth. She should not try to put words into mine.
This is probably our sixth rail privatisation debate in 15 months. The Labour party is obviously over-ambitious in trying to fill a full day's debate. Although the hon. Member for Thurrock (Mr. Mackinlay), who is not in his place, had difficulty squeezing into the debate, throughout the afternoon Opposition Members struggled to find anything new or relevant to say. Even the hon. Member for Ladywood could manage only a 20-minute speech.

Mr. Dalyell: Will the Minister give way?

Mr. Watts: I shall respond to the hon. Gentleman's point later. If I give way now, I shall have less time to do so.
It is clear that, after all this time, the Opposition are still trying to fill their policy vacuum in transport, as in much of their approach to politics. What should they do if they have a policy vacuum? The Labour motion suggests that the answer is to call for "a thorough review". Is its alternative to a policy to fill the vacuum with calls for a thorough review?
Reading on, I find some of the aims in the motion wholly admirable. It aims to secure
higher levels of rail investment, improved services
and finally, and quite importantly,
the best possible return on taxpayers' money.
The problem for the Opposition is that our policy, not theirs, meets those objectives. Having struggled for so long to find a policy, why are they so shy of adopting their normal approach, which is simply to embrace ours? They have done so on many other matters of policy, so why do they not on rail privatisation?
As my hon. Friend the Member for Worcester (Mr. Luff) reminded the House, the shadow Cabinet, reliant as it is on the support and sponsorship of the trade union movement, is unable to adopt an honest policy because the union bosses will not allow it.
The hon. Member for Cunninghame, North mentioned the investment plans of Railtrack and quoted rightly the statement that Railtrack intends to spend more than £1 billion a year for the next 10 years. What he did not quote, although he could have found it in the pathfinder prospectus from which many hon. Members have quoted so readily throughout the debate, was that in the five years to 31 March 2001 Railtrack intends to spend approximately £8.125 billion. That appears to be higher than the £1.37 billion that the hon. Gentleman said was necessary to achieve steady state spending.

My hon. Friend the hon. Member for Dartford (Mr. Dunn) dealt with the only real news of the day when he welcomed the announcement that, in letting the franchise for South Eastern Trains, there would be a requirement for new rolling stock. Incredibly, I heard during the course of the day that the trade union front organisation, Save Our Railways, said that it was opposed to that idea. It cannot even accept one piece of good news.
The hon. Member for Cunninghame, North asked how a promise to be fulfilled in 1999 could be given any credence. The final bids, which are to be made on the basis of the replacement of the rolling stock, must be with the franchising director by mid-June. When the franchise is let, the new franchiser will be locked into a contractual commitment to meet all the terms of the franchise agreement, including that to replace rolling stock. My hon. Friends know that they now have a promise on which they can rely, which they have not received from the nationalised railway industry.

Sir Roger Moate: Did my hon. Friend note that the hon. Member for Cunninghame, North (Mr. Wilson) expressed real disappointment that the order had been announced—and he got that wrong, as he did almost everything else? The hon. Gentleman said that the rolling stock would not be ordered until 1999. He missed the point that the rolling stock that will be life-expired by then must be replaced by 1999.

Mr. Watts: My hon. Friend is exactly right. It is not just South Eastern that will have new rolling stock, because the contract for the 15-year franchise for the Gatwick Express requires a commitment to a completely new fleet of rolling stock. The first franchise for Great Western contains a commitment for the total refurbishment of all rolling stock in return for a 10-year franchise. A couple of weeks ago, Porterbrook Leasing announced a £40 million-plus deal with ABB for the refurbishment of other InterCity stock.
The hon. Member for Linlithgow (Mr. Dalyell) made important points about the Forth bridge. It is absolutely clear that responsibility for the safety and maintenance of the Forth railway bridge lies firmly and squarely with Railtrack. The bridge is part of Railtrack's existing infrastructure, which it has a commitment to maintain. Furthermore, the Health and Safety Executive has powers to ensure that Railtrack honours its obligations to maintain the bridge in a safe condition. The executive has said that it is minded to serve improvement notices on Railtrack. Whether that is necessary is a matter of judgment for the HSE, but I understand that Railtrack has fully accepted the recommendations made in the report. As for the hon. Gentleman's other important and more detailed points, perhaps he will allow me to give him full answers in writing.

Mr. Dalyell: Perhaps many millions of pounds are involved. Should not that obligation be made clear in the prospectus?

Mr. Watts: Although the hon. Gentleman may be well—[Laughter.] The hon. Gentleman is obviously well. He may well be right that the cost of the repairs may run into millions of pounds. I have been talking about investment and renewal obligations running into billions


of pounds. In any event, from today's debate the significance of the Forth bridge will be seized upon by people outside the House.
My hon. Friend the Member for South-West Bedfordshire (Sir D. Madel) raised three matters, including the Dunstable bypass, which he introduced intriguingly by suggesting that savings made by the efficiencies of rail privatisation might be used to fund it. I will not make any commitments about sources of funding, but it is our intention to take forward the proposals for a planning conference and to examine the Dunstable bypass and associated transport issues in the area, including rail issues, as quickly as possible.
My hon. Friend the Member for South-West Bedfordshire expressed concerns about track-side safety. Under the new safety regime, which is much more rigorous than that which existed before restructuring, every business that undertakes work on the railway must prove its own safety case as a prerequisite of being permitted to undertake any work on the line. My hon. Friend the Member for South-West Bedfordshire mentioned the west coast main line. Railtrack has already let two contracts for the development of the new signalling and control system, and a third will be let shortly. Contracts for the main works will start to be let from June. The core project will be funded through existing, standard track access charges. Funding may be required for additional upgrades. Those matters will be considered when the cost and technical reviews of upgrade options are completed and discussions will take place between Railtrack, Opraf and the Department of Transport so that we can consider what funding may be necessary to enhance franchising of the route. The franchising director intends to bring forward the franchise for the west coast main line later this year.
My hon. Friend the Member for Keighley (Mr. Waller) said that the case for privatisation must be made on its merits and he went on to do so extremely well. He mentioned the benefits of fare regulation. Never before have passengers had the assurance that key fares will be pegged to the rate of inflation for three years and then to 1 per cent. below the rate of inflation for the four years thereafter. It is also clear that franchising is good news for passengers, who can see that, far from services being slashed, as our opponents have claimed falsely so many times, they are at least being maintained and in many instances being improved. Of course, franchising is also good news for taxpayers who can see that, for the first five franchises that have now been let, services that required a grant of £300 million to be operated by British Rail will be operated in the seventh year of the franchise for only £95 million. That is good news and it gives the lie to the claims that franchising is an expensive way to deliver rail services—quite the contrary.
My hon. Friend the Member for Keighley also mentioned rolling stock for the Airedale and Wharfedale lines. I hope that he will take comfort from the announcement today about south-eastern trains and the possibility of a franchise term long enough to justify new rolling stock. That shows that, far from privatisation and franchising being incompatible with the provision of new rolling stock, they will facilitate its delivery. I understand that the PTE is working on a replacement options report, which it hopes to have ready by the end of June or in early July. I have agreed to a meeting with the PTE, which

I hope my hon. Friend will lead, to discuss any ways in which the Department can help to ensure that the full benefits of the electrification of the line can be obtained.
The hon. Member for Hampstead and Highgate (Ms Jackson) entered the realms of fantasy when she claimed that privatisation would cost £2.6 billion. The reality is that the cost to the Government, from the start of the preparation to the end of the past financial year, is £145 million and the cost for British Rail and Railtrack is some £325 million. Against that, we have, so far, sale proceeds in excess of £2.3 billion. To put it another way, the total cost to date of £470 million is represented by only three years of savings on the average subsidy required for the first five franchises.
My hon. Friend the Member for Chorley (Mr. Dover) said that privatisation of Railtrack will deliver commercial investment funded by the private sector. The Labour alternative, of course, requires more funding through public sector borrowing, from higher fares or from higher taxation. We know that the hon. Member for Ladywood is prepared to pay more in taxes, because she has told us honestly that she is prepared to do that, but that does not run for other Opposition Members, so we must conclude that a Labour Government managing a nationalised railway would not find the funds that Labour Members say are needed to provide adequate investment.
My hon. Friend the Member for Chorley also mentioned access for disabled people. He will recognise that it is difficult to provide access at every station. Unfortunately, earlier generations did not build railway stations with disabled people in mind, but the Rail Regulator requires every train operating company to produce a disabled person's protection policy. The first step towards producing that is an inventory of the existing provision and facilities at stations, and that will be used as a benchmark against which further improvements will be measured.
The position is much brighter when it comes to access to rolling stock. Anglia Trains, Chiltern Railway, CrossCountry, Gatwick, Great Western, InterCity East Coast, InterCity West Coast, Island line, Mersey Rail Electrics and Midland Mainline, for example, are all operating fleets that are entirely accessible to people in wheelchairs. Other operators have mainly wheelchair-accessible rolling stock, even now.
The hon. Member for Burnley (Mr. Pike) reminded me of the Government's responsibility, our having been in office for 17 years, to ensure that railways are in a position to operate efficiently and effectively. We accept that responsibility, and we are taking action in the form of the privatisation programme to bring about precisely the improvements in services that everybody recognises should be made.
The hon. Gentleman used the odd term "fragmentation". The network is not fragmented. It was a policy decision that the entire rail network should be owned and managed by Railtrack as an integrated network. Network benefits, such as through ticketing, are all guaranteed by arrangements made by the franchising director and the regulator.

Mr. Pike: Will the Minister give way?

Mr. Watts: No. I do not have time to give way to the hon. Gentleman. The hon. Member for Cunninghame, North, who responded to the debate for the Opposition, overran his time and I must make the best use of mine.


The hon. Member for Burnley talked about Railtrack asset values. Track access charges are based on replacement values because the purpose of the charges is to ensure that assets can be replaced with their modern equivalents. Fixed assets in the most recent accounts were valued at £4.3 billion. Account must be taken, however, of the company's liabilities. The net assets of Railtrack—assets less liabilities—are only £2.4 billion, not the exaggerated figure of £6.5 billion that Opposition Members are so keen to quote.
My hon. Friend the Member for Cheadle (Mr. Day) made some thoughtful observations on railway safety. It is still part of the culture to share experience on safety matters. Some of the so-called leaks on safety that make the Opposition so excited arise only because it is part of the system widely to disseminate information on safety matters within the industry. I particularly welcome my hon. Friend's support for the Government in defeating the Opposition's motion. Like many of my other hon. Friends, and hon. Members representing parties other than the Opposition, my hon. Friend is much too wily to be caught out by squalid little tricks from the Labour party.

Mr. Paul Boateng: Is this the peroration?

Mr. Watts: No. There is no peroration. I am trying to respond to the many points that have been made in a long debate.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) accused the Government of bad faith over the privatisation and flotation of Railtrack, as did other hon. Members. I shall set the record straight. My right hon. Friend the Member for Kettering (Mr. Freeman), the then Minister for Public Transport, said on 23 February 1993:
Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c.400.]
It is also true that my right hon. Friend said on Lords amendments on 1 November 1993:
Ultimately we wish to see Railtrack move into the private sector, although we cannot forecast when that will happen."—[Official Report, 1 November 1993; Vol. 231, c. 43.]
Lord Caithness, the then Minister of State, Department of Transport, said in July 1993 that the Government had made it clear that
Railtrack's existence as a government-owned company will last only until it is feasible to transfer it to the private sector." —[Official Report, House of Lords, 15 July 1993; Vol. 548, c. 354.]
Any accusation of bad faith is totally without foundation.
I call on my right hon. and hon. Friends to defeat the Labour motion for the nonsense that it is and to support the amendment in the name of my right hon. Friend the Prime Minister.

Question put, That the original words stand part of the Question:

The House divided: Ayes 287, Noes 306

Division No. 99]
[10.00 pm


AYES


Abbott, Ms Diane
Dewar, Donald


Adams, Mrs Irene
Dixon, Don


Ainger, Nick
Dobson, Frank


Ainsworth, Robert (Cov'try NE)
Donohoe, Brian H


Allen, Graham
Dowd, Jim


Alton, David
Dunwoody, Mrs Gwyneth


Anderson, Ms Janet (Ros'dale)
Eagle, Ms Angela


Armstrong, Hilary
Eastham, Ken


Ashdown, Rt Hon Paddy
Etherington, Bill


Ashton, Joe
Evans, John (St Helens N)


Austin-Walker, John
Ewing, Mrs Margaret


Banks, Tony (Newham NW)
Fatchett, Derek


Barnes, Harry
Faulds, Andrew


Barron, Kevin
Field, Frank (Birkenhead)


Battle, John
Fisher, Mark


Bayley, Hugh
Flynn, Paul


Beckett, Rt Hon Margaret
Foster, Rt Hon Derek


Beith, Rt Hon A J
Foster, Don (Bath)


Bell, Stuart
Foulkes, George


Benn, Rt Hon Tony
Fraser, John


Benton, Joe
Fyfe, Maria


Bermingham, Gerald
Galbraith, Sam


Berry, Roger
Galloway, George


Betts, Clive
Gapes, Mike


Blair, Rt Hon Tony
Godman, Dr Norman A


Blunkett, David
Godsiff, Roger


Boateng, Paul
Golding, Mrs Llin


Bradley, Keith
Graham, Thomas


Bray, Dr Jeremy
Grant, Bernie (Tottenham)


Brown, Gordon (Dunfermline E)
Griffiths, Nigel (Edinburgh S)


Brown, N (N'c'tle upon Tyne E)
Griffiths, Win (Bridgend)


Bruce, Malcolm (Gordon)
Grocott, Bruce


Burden, Richard
Gunnell, John


Byers, Stephen
Hain, Peter


Caborn, Richard
Hall, Mike


Callaghan, Jim
Hanson, David


Campbell, Mrs Anne (C'bridge)
Hardy, Peter


Campbell, Ronnie (Blyth V)
Harman, Ms Harriet


Campbell-Savours, D N
Harvey, Nick


Canavan, Dennis
Hattersley, Rt Hon Roy


Cann, Jamie
Henderson, Doug


Carlile, Alexander (Montgomery)
Henderson, Dr Joe


Chidgey, David
Heppell, John


Chisholm, Malcolm
Hill, Keith (Streatham)


Church, Judith
Hinchliffe, David


Clapham, Michael
Hodge, Margaret


Clark, Dr David (South Shields)
Hoey, Kate


Clarke, Tom (Monklands W)
Hogg, Norman (Cumbernauld)


Clelland, David
Home Robertson, John


Clwyd, Mrs Ann
Hood, Jimmy


Coffey, Ann
Hoon, Geoffrey


Cohen, Harry
Howarth, Alan (Strat'rd-on-A)


Connarty, Michael
Howarth, George (Knowsley North)


Cook, Robin (Livingston)
Howells, Dr Kim (Pontypridd)


Corbyn, Jeremy
Hoyle, Doug


Corston, Jean
Hughes, Kevin (Doncaster N)


Cousins, Jim
Hughes, Robert (Aberdeen N)


Cox, Tom
Hughes, Roy (Newport E)


Cummings, John
Hughes, Simon (Southwark)


Cunningham, Jim (Covy SE)
Hutton, John


Cunningham, Rt Hon Dr John
Illsley, Eric


Cunningham, Roseanna
Ingram, Adam


Dafis, Cynog
Jackson, Glenda (H'stead)


Dalyell, Tam
Jamieson, David


Darling, Alistair
Janner, Greville


Davidson, Ian
Johnston, Sir Russell


Davies, Bryan (Oldham C'tral)
Jones, Barry (Alyn and D'side)


Davies, Chris (L'Boro & S'worth)
Jones, Ieuan Wyn (Ynys Môn)


Davies, Rt Hon Denzil (Llanelli)
Jones, Jon Owen (Cardiff C)


Davies, Ron (Caerphilly)
Jones, Lynne (B'ham S O)


Davis, Terry (B'ham, H'dge H'l)
Jones, Martyn (Clwyd, SW)


Denham, John
Jones, Nigel (Cheltenham)






Jowell, Tessa
Powell, Ray (Ogmore)


Kaufman, Rt Hon Gerald
Prentice, Bridget (Lew'm E)


Keen, Alan
Prentice, Gordon (Pendle)


Kennedy, Charles (Ross, C&S)
Prescott, Rt Hon John


Kennedy, Jane (L'pool Br'dg'n)
Primarolo, Dawn


Khabra, Piara S
Purchase, Ken


Kilfoyle, Peter
Quin, Ms Joyce


Kirkwood, Archy
Radice, Giles


Lestor, Joan (Eccles)
Randall, Stuart


Lewis, Terry
Raynsford, Nick


Liddell, Mrs Helen
Reid, Dr John


Litherland, Robert
Rendel, David


Livingstone, Ken
Robertson, George (Hamilton)


Lloyd, Tony (Stretford)
Robinson, Geoffrey (Co'try NW)


Llwyd, Elfyn
Robinson, Peter (Belfast E)


Loyden, Eddie
Roche, Mrs Barbara


Lynne, Ms Liz
Rooker, Jeff


McAllion, John
Rooney, Terry


McAvoy, Thomas
Ross, Ernie (Dundee W)


McCartney, Ian
Rowlands, Ted


McCartney, Robert
Ruddock, Joan


Macdonald, Calum
Salmond, Alex


McFall, John
Sedgemore, Brian


McGrady, Eddie
Sheerman, Barry


McKelvey, William
Sheldon, Rt Hon Robert


Mackinlay, Andrew
Shore, Rt Hon Peter


McLeish, Henry
Short, Clare


Maclennan, Robert
Simpson, Alan


McMaster, Gordon
Skinner, Dennis


McNamara, Kevin
Smith, Andrew (Oxford E)


MacShane, Denis
Smith, Chris (Isl'ton S & F'sbury)


McWilliam, John
Smith, Llew (Blaenau Gwent)


Madden, Max
Snape, Peter


Maddock, Diana
Soley, Clive


Mahon, Alice
Spearing, Nigel


Mallon, Seamus
Spellar, John


Mandelson, Peter
Squire, Rachel (Dunfermline W)


Marek, Dr John
Steel, Rt Hon Sir David


Marshall, Jim (Leicester, S)
Steinberg, Gerry


Martin, Michael J (Springburn)
Stevenson, George


Martlew, Eric
Stott, Roger


Maxton, John
Strang, Dr. Gavin


Meacher, Michael
Straw, Jack


Meale, Alan
Sutcliffe, Gerry


Michael, Alun
Taylor, Mrs Ann (Dewsbury)


Michie, Bill (Sheffield Heeley)
Thompson, Jack (Wansbeck)


Michie, Mrs Ray (Argyll & Bute)
Timms, Stephen


Milburn, Alan
Tipping, Paddy


Miller, Andrew
Touhig, Don


Mitchell, Austin (Gt Grimsby)
Trickett, Jon


Moonie, Dr Lewis
Tyler, Paul


Morgan, Rhodri
Vaz, Keith


Morley, Elliot
Walker, Rt Hon Sir Harold


Morris, Estelle (B'ham Yardley)
Wallace, James


Morris, Rt Hon John (Aberavon)
Walley, Joan


Mowlam, Marjorie
Wardell, Gareth (Gower)


Mudie, George
Wareing, Robert N


Mullin, Chris
Watson, Mike


Murphy, Paul
Welsh, Andrew


Nicholson, Emma (Devon West)
Wicks, Malcolm


Oakes, Rt Hon Gordon
Wigley, Dafydd


O'Brien, Mike (N W'kshire)
Williams, Alan W (Carmarthen)


O'Brien, William (Normanton)
Wilson, Brian


O'Hara, Edward
Winnick, David


O'Neill, Martin
Wise, Audrey


Orme, Rt Hon Stanley
Worthington, Tony


Paisley, The Reverend Ian
Wray, Jimmy


Parry, Robert
Wright, Dr Tony


Pearson, Ian
Young, David (Bolton SE)


Pendry, Tom



Pickthall, Colin
Tellers for the Ayes:


Pike, Peter L
Mr. Eric Clarke and


Pope, Greg
Mr. Dennis Turner.





NOES


Ainsworth, Peter (East Surrey)
Douglas-Hamilton, Lord James


Aitken, Rt Hon Jonathan
Dover, Den


Alexander, Richard
Duncan, Alan


Alison, Rt Hon Michael (Selby)
Duncan Smith, Iain


Allason, Rupert (Torbay)
Dunn, Bob


Amess, David
Durant, Sir Anthony


Ancram, Rt Hon Michael
Eggar, Rt Hon Tim


Arbuthnot, James
Evans, David (Welwyn Hatfield)


Arnold, Jacques (Gravesham)
Evans, Jonathan (Brecon)


Arnold, Sir Thomas (Hazel Grv)
Evans, Nigel (Ribble Valley)


Ashby, David
Evans, Roger (Monmouth)


Aspinwall, Jack
Evennett, David


Atkins, Rt Hon Robert
Faber, David


Atkinson, David (Bour'mouth E)
Fabricant, Michael


Atkinson, Peter (Hexham)
Fenner, Dame Peggy


Baker, Rt Hon Kenneth (Mole V)
Field, Barry (Isle of Wight)


Baker, Nicholas (North Dorset)
Fishburn, Dudley


Baldry, Tony
Forman, Nigel


Banks, Matthew (Southport)
Forsythe, Clifford (S Antrim)


Banks, Robert (Harrogate)
Forth, Eric


Bates, Michael
Fowler, Rt Hon Sir Norman


Batiste, Spencer
Fox, Rt Hon Sir Marcus (Shipley)


Beggs, Roy
Freeman, Rt Hon Roger


Bellingham, Henry
French, Douglas


Bendall, Vivian
Fry, Sir Peter


Beresford, Sir Paul
Gale, Roger


Body, Sir Richard
Gallie, Phil


Bonsor, Sir Nicholas
Gardiner, Sir George


Booth, Hartley
Garnier, Edward


Boswell, Tim
Gill, Christopher


Bottomley, Peter (Eltham)
Gillan, Cheryl


Bottomley, Rt Hon Virginia
Goodlad, Rt Hon Alastair


Bowden, Sir Andrew
Goodson-Wickes, Dr Charles


Bowis, John
Gorman, Mrs Teresa


Boyson, Rt Hon Sir Rhodes
Gorst, Sir John


Brandreth, Gyles
Grant, Sir A (SW Cambs)


Brazier, Julian
Greeenway, Harry (Ealing N)


Bright, Sir Graham
Greenway, John (Ryedale)


Brooke, Rt Hon Peter
Griffiths, Peter (Portsmouth, N)


Brown, M (Brigg & Cl'thorpes)
Grylls, Sir Michael


Browning, Mrs Angela
Gummer, Rt Hon John Selwyn


Bruce, Ian (South Dorset)
Hague, Rt Hon William


Budgen, Nicholas
Hamilton, Rt Hon Sir Archibald


Burt, Alistair
Hamliton, Neil (Tatton)


Butcher, John
Hampson, Dr Keith


Butler, Peter
Hanley, Rt Hon Jeremy


Butterfill, John
Hannam, Sir John


Carlisle, John (Luton North)
Hargreaves, Andrew


Carlisle, Sir Kenneth (Lincoln)
Harris, David


Carrington, Matthew
Haselhurst, Sir Alan


Cash, William
Hawkins, Nick


Channon, Rt Hon Paul
Hawksley, Warren


Chapman, Sir Sydney
Hayes, Jerry


Clappison, James
Heald, Oliver


Clark, Dr Michael (Rochford)
Heath, Rt Hon Sir Edward


Clarke, Rt Hon Kenneth (Ru'clif)
Heathcoat-Amory, Rt Hon David


Coe, Sebastian
Hendry, Charles


Colvin, Michael
Heseltine, Rt Hon Michael


Congdon, David
Hicks, Robert


Conway, Derek
Hill, James (Southampton Test)


Coombs, Anthony (Wyre For'st)
Hogg, Rt Hon Douglas (G'tham)


Coombs, Simon (Swindon)
Horam, John


Cope, Rt Hon Sir John
Hordern, Rt Hon Sir Peter


Cormack, Sir Patrick
Howard, Rt Hon Michael


Couchman, James
Howell, Rt Hon David (G'dford)


Cran, James
Howell, Sir Ralph (N Norfolk)


Currie, Mrs Edwina (S D'by'ire)
Hughes, Robert G (Harrow W)


Curry, David (Skipton & Ripon)
Hunt, Rt Hon David (Wirral W)


Davies, Quentin (Stamford)
Hunt, Sir John (Ravensbourne)


Davis, David (Boothferry)
Hunter, Andrew


Day, Stephen
Hurd, Rt Hon Douglas


Deva, Nirj Joseph
Jack, Michael


Devlin, Tim
Jackson, Robert (Wantage)


Dicks, Terry
Jenkin, Bernard


Dorrell, Rt Hon Stephen
Jessel, Toby






Johnson Smith, Sir Geoffrey
Paice, James


Jones, Gwilym (Cardiff N)
Patten, Rt Hon John


Jones, Robert B (W Hertfdshr)
Pattie, Rt Hon Sir Geoffrey


Jopling, Rt Hon Michael
Pawsey, James


Key, Robert
Peacock, Mrs Elizabeth


King, Rt Hon Tom
Pickles, Eric


Kirkhope, Timothy
Porter, Barry (Wirral S)


Knapman, Roger
Porter, David (Waveney)


Knight, Mrs Angela (Erewash)
Portillo, Rt Hon Michael


Knight, Rt Hon Greg (Derby N)
Powell, William (Corby)


Knox, Sir David
Rathbone, Tim


Lait, Mrs Jacqui
Redwood, Rt Hon John


Lamont Rt Hon Norman
Renton, Rt Hon Tim


Lang, Rt Hon Ian
Richards, Rod


Lawrence, Sir Ivan
Riddick, Graham


Legg, Barry
Rifkind, Rt Hon Malcolm


Leigh, Edward
Robathan, Andrew


Lennox-Boyd, Sir Mark
Roberts, Rt Hon Sir Wyn


Lester, Sir James (Broxtowe)
Robertson, Raymond (Ab'd'n S)


Lidington, David
Roe, Mrs Marion (Broxbourne)


Lilley, Rt Hon Peter
Rowe, Andrew (Mid Kent)


Lord, Michael
Rumbold, Rt Hon Dame Angela


Luff, Peter
Ryder, Rt Hon Richard


Lyell, Rt Hon Sir Nicholas
Sackville, Tom


MacGregor, Rt Hon John
Sainsbury, Rt Hon Sir Timothy


MacKay, Andrew
Scott, Rt Hon Sir Nicholas


Maclean, Rt Hon David
Shaw, David (Dover)


McLoughlin, Patrick
Shaw, Sir Giles (Pudsey)


McNair-Wilson, Sir Patrick
Shephard, Rt Hon Gillian


Madel, Sir David
Shepherd, Sir Colin (Hereford)


Maginnis, Ken
Shepherd, Richard (Aldridge)


Maitland, Lady Olga
Shersby, Sir Michael


Malone, Gerald
Sims, Roger


Mans, Keith
Skeet, Sir Trevor


Marland, Paul
Smith, Sir Dudley (Warwick)


Marlow, Tony
Smith, Tim (Beaconsfield)


Marshall, John (Hendon S)
Smyth, The Reverend Martin


Marshall, Sir Michael (Arundel)
Soames, Nicholas


Martin, David (Portsmouth S)
Speed, Sir Keith


Mates, Michael
Spencer, Sir Derek


Mawhinney, Rt Hon Dr Brian
Spicer, Sir James (W Dorset)


Mayhew, Rt Hon Sir Patrick
Spicer, Sir Michael (S Worcs)


Mellor, Rt Hon David
Spink, Dr Robert


Merchant, Piers
Spring, Richard


Mills, Iain
Sproat, Iain


Mitchell, Andrew (Gedling)
Squire, Robin (Hornchurch)


Mitchell, Sir David (NW Hants)
Stanley, Rt Hon Sir John


Moate, Sir Roger
Steen, Anthony


Molyneaux, Rt Hon Sir James
Stem, Michael


Monro, Rt Hon Sir Hector
Stewart, Allan


Montgomery, Sir Fergus
Streeter, Gary


Moss, Malcolm
Sumberg, David


Needham, Rt Hon Richard
Sweeney, Walter


Nelson, Anthony
Sykes, John


Neubert, Sir Michael
Tapsell, Sir Peter


Newton, Rt Hon Tony
Taylor, Ian (Esher)


Nicholls, Patrick
Taylor, Rt Hon John D (Strgfd)


Nicholson, David (Taunton)
Taylor, John M (Solihull)


Norris, Steve
Taylor, Sir Teddy (Southend, E)


Onslow, Rt Hon Sir Cranley
Temple-Morris, Peter


Oppenheim, Phillip
Thompson, Sir Donald (C'er V)


Ottaway, Richard
Thompson, Patrick (Norwich N)


Page, Richard
Thornton, Sir Malcolm





Townend, John (Bridlington)
Whitney, Ray


Townsend, Cyril D (Bexl'yh'th)
Whittingdale, John


Tracey, Richard
Widdecombe, Ann


Tredinnick, David
Wiggin, Sir Jerry


Trend, Michael
Wilkinson, John


Trotter, Neville
Willetts, David


Twinn, Dr Ian
Wilshire, David


Vaughan, Sir Gerard
Winterton, Mrs Ann (Congleton)


Waldegrave, Rt Hon William
Winterton, Nicholas (Macc'fld)


Walker, Bill (N Tayside)
Wolfson, Mark


Waller, Gary
Wood, Timothy


Ward, John
Yeo, Tim


Wade, Charles (Bexhill)
Young, Rt Hon Sir George


Waterson, Nigel



Watts, John
Tellers for the Noes:


Wells, Bowen
Dr. Liam Fox and


Wheeler, Rt Hon Sir John
Mr. Simon Burns.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments) and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the Government on the progress that it is making with privatisation, with the franchising in the last three weeks alone of the InterCity East Coast, Gatwick Express and Network South Central lines, offering the prospects of better services and higher investment at less cost to tax-payers; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as a golden opportunity for the railways to gain access to the private finance necessary for investment, and for people to become real stakeholders in the railways, thanks to the Government's policy of wider share ownership.

BUSINESS OF THE HOUSE

Ordered,
That the Order [25th March] relating to the Family Law Bill [Lords] shall apply to any sitting day on which the House resolves itself into a Committee on those provisions of the Bill committed to a Committee of the whole House; and proceedings in the said Committee may be taken, though opposed, after Ten o'clock.—[Mr. McLoughlin.]

NORTHERN IRELAND (ENTRY TO NEGOTIATIONS, ETC) BILL

Ordered,
That, in respect of the Northern Ireland (Entry to Negotiations, Etc) Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. McLoughlin.]

Gas Supplies (Scotland)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]

Mr. John Home Robertson: Friday 29 December 1995 was the coldest day in a week of perishing cold weather in Scotland. But when my constituents in Prestonpans, Cockenzie and Port Seton woke up that morning, many of them found that the frost was gripping their bedrooms and kitchens as well as their gardens, because the gas supply to 4,180 households had failed.
It took up to three days to turn the gas on again, so more than 10,000 people in my constituency had a horrible Hogmanay weekend, relying on emergency soup kitchens while the frost burst the water pipes in their homes. There was a similiar failure in the gas supply at Stonehouse in Lanarkshire, and my hon. Friend the Member for Clydesdale (Mr. Hood) may wish to refer to that later in the debate.
This major failure of the gas supply got some attention from the national media, and British Gas's distribution company, TransCo, had to bring in 150 engineers from as far away as Brighton and Cornwall to reinstate our local gas supply in East Lothian. I would like to express my constituents' thanks to those engineers, who did a good job in difficult circumstances when I am sure that they would have preferred to be spending the holiday week with their families at home.
Three months later, the Director General of Gas Supply published the findings of the Ofgas inquiry into this incident. I am sorry to say that the Ofgas report has whitewashed the minor points and missed the main points altogether. The main point surely is that the circumstances were not unpredictable, so the failure of the gas supply should not have been allowed to happen. I am not satisfied that my constituents' experiences have been taken seriously, and I fear that similar failures will occur elsewhere in the future if we do not take steps to impose better standards on this highly profitable privatised industry. That is why I am raising this matter in the House.
I will give a brief summary of the events in Prestonpans, Cockenzie and Port Seton at the end of December. As I have said, the weather was extremely cold. In Edinburgh, the temperature dropped to minus 8 deg C on Wednesday 27th, minus 12 deg C on Thursday, minus 13 deg C on Friday and minus 14 deg C on Saturday 30 December. But it was several degrees colder in other parts of Scotland. Both Glasgow and Aberdeen experienced temperatures of minus 20 deg C during that week.
Evidently the main gas supply into that part of my constituency was not big enough to meet the morning and evening peak demands when people were heating their homes and cooking meals. There is a gasholder at Preston Links that fills up when demand is low, to boost the local supply at times of peak demand. The gasholder is checked regularly, and on 27 December it had 20 per cent. less gas than it should have had, and the pressure in the system was low.
If TransCo had been paying any attention to the weather forecast, it would have realised that things were going to get worse, and it should have taken steps to avoid

the crisis that followed. But it did nothing. On the night of the 28th, the gasholder stock ran out, the incoming supply could not keep up with the demand for gas and the pressure in the system fell dangerously low, so all the gas customers in the area—4,180 households, more than 10,000 people—were cut off early in the morning of 29 December.
The gas supply system had collapsed, and it was in a dangerous condition because air could have been drawn into the supply pipes. So it was necessary to isolate street sections, check each householder's gas installation and bleed off the air in the system before restoring the gas supply. That was a major task, involving 150 engineers, including 100 who came up from England. Some households got their gas supplies restored within 24 hours, but the unluckier ones had to wait for up to three days in very cold weather.
East Lothian district council and Lothian regional council, together with the police and emergency services, had to go into action to provide support for elderly and disabled people, and to set up emergency reception centres and catering in the two local community centres. British Gas used its GasCare register to help to identify those most at risk, and information was provided through an emergency telephone service and the local media. TransCo helpfully distributed hundreds of electric heaters, but it was not altogether surprising that the resulting surge in demand for electricity in one street led to a temporary failure in the electricity supply, as if things were not bad enough already.
I kept in close touch with the situation, and I was advised that the official standards of service for the gas industry would require the payment of compensation of £20 a day to affected householders. But of course, at that stage, everyone was rightly concentrating on the main objective of restoring the gas supply, which was eventually completed just in time for Hogmanay. There were still burst waterpipes to repair on 1 January as people began to count their costs, and TransCo started looking for excuses.
TransCo rightly recognised the risk of a public relations disaster if it were to try to sidestep its liability to pay compensation. So it offered the two local community councils the princely sum of £1,000 each. It has not offered to contribute towards the substantial costs incurred by the local authorities—which I understand run into tens of thousands of pounds—but it did make the appropriate £20-a-day payments to affected householders "as a good will gesture". It stipulated that it was an ex gratia payment rather than fulfilment of any obligation, let alone an admission of liability. That bothers me, Mr. Deputy Speaker.
TransCo has claimed that the failure of the supply was due to exceptional circumstances under its contractual standards of service, and that the company was under no obligation to maintain the supply or to pay any compensation. Amazingly, Ofgas has now endorsed that interpretation, and I put it to the Minister that those standards of service must be amended to avoid the risk of similar failures in cold weather in the future.
Key standard 6 in British Gas's standards of service stipulates criteria for continuity of supply with an exception for
interruptions caused by circumstances beyond the Company's control where restoration of the supply within 24 hours is impossible due to exceptional circumstances".


Ofgas has defined "exceptional circumstances" as anything with less than a one in 20 chance of occurring, which means that British Gas can avoid responsibility for any supply failure in Scotland if the effective temperature falls below minus 6 deg C. That calculation in this instance was made on a national basis, with bizarre consequences: the lower temperature in Glasgow and Aberdeen, where the supply did not fail, has been used to help to justify the cut-off in East Lothian, where the weather was less severe.
As things stand, it appears that, if the weather gets very cold, and if there is more than a marginal increase in customer demand for gas—just 12 per cent. in the case of East Lothian in December—this massively profitable privatised utility has no contractual obligation to keep the gas flowing. The company will go on paying Cedric Brown's £247,000 pension and Richard Giordano's £450,000 salary plus perks, but the poor old customers can freeze as far as it is concerned.
I suggest a variation to the proverb: if you can't stand the cold, don't use gas in your kitchen. As climatic change seems to be leading to colder winters, Ofgas's one in 20 criterion is probably out of date. Do we seriously believe that it will be 80 years before the weather gets as cold as it was last winter? I do not think so.
The experience of my constituents makes it painfully clear that British Gas must be required to upgrade inadequate parts of the supply network or face penalties if things go wrong. There are other areas with potentially dodgy supplies that depend on gasholders, including parts of Glasgow.
The crisis should have been predictable. TransCo knew the limitations of the local supply system and knew that British Gas had taken on a lot of new domestic customers in new housing developments in the area. A total of 441 new houses have been built in the Prestonpans, Cockenzie and Port Seton area since 1990—almost all of them with gas central heating.
We now know that TransCo had plans to upgrade the supply and to do away with the Preston Links gasholder. I hope that the Minister will be able to assure me that the work will be completed before next winter, but I am afraid that the gasholder is still there—I saw it on Monday. The margin between capacity and possible demand should never have been so finely balanced in the first place.
Paragraph 4.2 of the Ofgas report, under the heading "Action to Prevent a Recurrence", makes a significant tacit acknowledgement that all is not well in the system. It states:
TransCo Districts have been asked to undertake further planning and load sensitivity studies to consider whether any additional opportunities might exist to alleviate supply difficulties in periods of extreme temperatures at the limit of the system design criteria.
It will take more than studies—we need assurances that the necessary work will be funded and carried out. It is imperative that the national criteria for the supply system be amended to guarantee the requirements of customers at times of greatest need; otherwise, it is quite possible that whole cities could be cut off as my constituents were last December
No doubt British Gas and other commercial gas suppliers will be reluctant to pay their share of the cost of upgrading TransCo's pipeline network. However, Ofgas

must surely have an overriding duty to protect customers' interests by stipulating proper criteria for security of supply to avoid this kind of breakdown. Ofgas has seen fit to make excuses and to quote escape clauses for the failure of the supply in East Lothian last December. It is up to the Minister and the House to tell the Director General of Gas Supply to put public interests before the commercial interests of gas suppliers in the future.
The risk of supply failures can and should be minimised—that is the important point that the Minister must address. However, it will never be possible to eliminate the risk altogether. We must have the best possible contingency plans and systems to provide for the needs of elderly, disabled and vulnerable people in the event of a gas cut. The GasCare system seems to have worked reasonably well in this case, although I understand that the register is far from complete.
I am told that up to 1 million eligible customers are not registered under the current set-up. I gather that the threatened diversification of domestic gas suppliers could play havoc with TransCo's GasCare database in the future. I am advised that the register will show only the account number and address of elderly and disabled customers, so it will be a complicated task to find their names and telephone numbers in order to provide support and advice in an emergency, such as the one that occurred in December. The Government are promoting this market madness, so is it too much to ask the Minister to take account of the consequences for vulnerable people?
In conclusion, I inform the Minister that a large number of my constituents are very angry about the failure of their gas supply last December, and they have not been impressed by the dodging and weaving of British Gas, TransCo and Ofgas in the aftermath of that failure. I am grateful to Prestonpans community council, Cockenzie and Port Seton community council, the local members of the East Lothian and Lothian councils and Mr. Euan Robson of the Scottish Gas Consumers Council for making representations on behalf of gas customers. People are entitled to expect appropriate action, especially in East Lothian and other parts of the country where the system may be risky.
The clear conclusion is that this sort of predictable and avoidable gas supply failure must not be allowed to happen again in East Lothian or anywhere else. Effective contractual safeguards must be set and enforced. When I wrote to the Minister for Small Business, Industry and Energy in January, he replied:
it is important to know why it happened and what lessons can be learned".
and said that these were matters for the Director General of Gas Supply.
Sadly, Ofgas has whitewashed the incident and fudged the lessons, so I put it to the Minister that he has a duty to intervene to set proper standards for the gas supply industry.

The Minister for Small Business, Industry and Energy (Mr. Richard Page): I am grateful to the hon. Member for East Lothian (Mr. Home Robertson) for raising this important subject. Although the hour is late and springtime is arriving, it is right that we should have an opportunity to discuss this subject. I pay tribute to the great interest that he has taken in representing his


constituents, and express my appreciation to my hon. Friend the Minister of State, Scottish Office, for joining me tonight.

Mr. Home Robertson: He is a constituent of mine.

Mr. Page: I am delighted that he is, and I sincerely hope that my hon. Friend did not have his gas cut off just after Christmas.
It might help the hon. Gentleman if I explained for the record how gas supply security has been approached by British Gas, and the standard licence conditions set by the President of the Board of Trade under the Gas Act 1995.
There are two principal aspects to security of gas supplies. The first is to secure that each winter there is sufficient gas to meet demand. That is achieved by means of the network code, which provides the economic incentives for gas shippers and suppliers to obtain sufficient gas and the price signals that can trigger demand by larger users. Further flexibility arises where gas is conveyed on interruptible terms to large industrial consumers, allowing the suspension of supply where needed. Those arrangements are together designed to secure that sufficient gas is available to domestic customers to meet the demand that would arise in one winter in 50.
The second aspect of supply security is ensuring that there is sufficient pipeline capacity to get the gas to where it is needed. That is a more complicated task, because it involves the operation of each part of the gas pipeline network in Great Britain, which runs to a staggering 0.25 million km of pipes. The criterion is that the system must be designed to meet the demand occurring on the peak day likely to occur in one winter in 20. The hon. Gentleman referred to his concern about that limit.
Those security criteria have been used for the planning and development of the gas network, and were reviewed by British Gas in the context of the 1993 Monopolies and Mergers Commission report. They have now been enshrined as specific regulatory obligations in the new licences.
On the specific incident, let me again say, as I have already said at Question Time, how sorry I was to hear about the supply failure that affected part of the hon. Gentleman's constituency during what he admitted was exceptionally severe weather last December. Whether we are, as he suggested, entering another ice age is a matter for debate. I stress the word "exceptionally". I understand that the nearest monitoring station, the Royal Botanic Garden in Edinburgh, recorded the coldest temperatures since records began there. The hon. Gentleman emphasised that it was exceptional.
It is an example of Murphy's law, and an undesirable fact of life, that many of the services upon which we depend are prone to break down just when we need them the most, because that is when they are placed under the greatest stress. In fact, the gas distribution system is highly resilient, and hardly ever breaks down through excess demand. That it did on this occasion was a consequence of prolonged very bad weather combined with higher than usual residential demand due to the Christmas and new year holiday.
At this stage—I think that the hon. Gentleman has endorsed this—I should like to acknowledge the great efforts made by those working in the gas industry and the

local authority to minimise the disruption and inconvenience caused. I pay tribute to the way in which the people affected in both East Lothian and Lanarkshire coped with the incidents.
As the hon. Gentleman is aware, high demand caused the supply disruption during the extremely cold weather. I thought that he might be interested to note that demand was 121 per cent. more than the demand for an average winter day, which is more than double. The local supply system, despite being built to the required standard, was sadly unable to cope with that unprecedented demand due to that operational constraint, which is already being removed. As the hon. Gentleman said, there was a risk of air getting in and a danger to the system, which had to be shut down for safety reasons. I understand that emergency plans and procedures, including those involving the local agencies, were duly implemented.
Just over 4,000 homes were cut off in East Lothian on Friday 29 December, and 500 had their supplies restored the same day. As the hon. Gentleman said, engineers were called from the length and breadth of the United Kingdom, and worked ceaselessly and tirelessly to try to restore supplies. That process of restoring supplies required a visit to every house by a gas engineer. I believe that some of the delays were caused by the difficulty of getting access to some of the houses, which is why it took three days to reconnect some. As it happened, by Saturday 30 December most of the supplies were restored because those 100-plus engineers worked around the clock.
Both TransCo and Scottish Gas made strenuous efforts to help those customers who suffered disruption to their supplies. They paid particular attention to those with special needs, such as the elderly. As the hon. Gentleman no doubt knows, an incident room was set up in a local primary school to co-ordinate welfare provision and the restoration of supplies.
In particular, British Gas liaised with the regional council to arrange food and warmth in community centres, town halls and schools. It provided several hundred electric heaters and cookers for those in greatest need, and supplied pre-paid power cards for distribution to pensioners and people on income support. Scottish Gas provided a 24-hour help line, and also made contact with those on the GasCare register—the record of customers who have notified British Gas of their age or special needs—to check that they had adequate heating and cooking.

Mr. Tam Dalyell: The Minister emphasised that the Lothian region performed extremely well, and so it did, but Lothian region is no more, thanks to the crazy local government reorganisation. It is far from clear that in West Lothian, East Lothian or Midlothian one, would get the same service if the situation were ever to arise again.

Mr. Page: This is not quite the opportunity to debate the reorganisation of Scottish local authority activities.

Mr. Dalyell: The hon. Gentleman mentioned it.

Mr. Page: Although I said that Lothian coped well, I am confident that its successors will have equally adequate support systems in place if such a disaster ever occurs again.


TransCo's efforts to keep consumers informed about the situation—including about 80 media updates and door-to-door calls—have been criticised. TransCo is considering how improvements in those procedures can be made. I will ensure that the comments of the hon. Member for East Lothian about having a register and the security of the register for the most vulnerable are drawn to the attention of British Gas, so that it can take those concerns into account.
Unlike the hon. Member for East Lothian, I am grateful to the Director-General of Gas Supply for the thorough investigation that her office has undertaken into the incident in East Lothian. I do not so casually dismiss the work that she has done on the investigation. It has provided a basis of factual material that has certainly helped me to prepare for this debate.
I understand that some of the hon Member's constituents believed that the interruption to their supplies was due to the diversion of supplies to Edinburgh. The Ofgas investigation paid particular attention to that concern, but concluded that the interruption arose from the demands placed on the local supply system, and not as a result of deliberate demand management by TransCo.

Mr. Home Robertson: I realise that the Minister has been well briefed for the debate, but I did not raise that issue, precisely because I am satisfied with the explanation given by Ofgas. What I said was that the criterion to which the Minister has referred—the one-in-20 criterion—is plainly insufficient. If that criterion is taken as an acceptable baseline, it means that all of us will experience two or perhaps three complete shutdowns of the gas supply in our houses in our lifetime. That is not tolerable. It is up to the Minister and Ofgas to impose realistic criteria to ensure genuine safety of supply in cold winters.

Mr. Page: Time is not on my side. I do not have enough to argue the point back and forth, but, if I recall correctly—I shall read the report of our proceedings—the hon. Gentleman used words such as "whitewash" in relation to the report. That is slightly dismissive. He says that the one-in-20 criterion is not adequate, but, apart from a small shutdown in Lanarkshire, the details of which I am not completely au fait with, the incident in East Lothian was the only one that I am aware has occurred in the past 10 years.

Mr. Home Robertson: So that is all right, then?

Mr. Page: I did not say that it was all right. As the hon. Gentleman is saying that there will be two or three

such incidents in the next year or so, I have to point out that, in the past 10 years at least, there has been only the one incident. It must not be blown out of all proportion. If the hon. Gentleman can contain his enthusiasm, I hope that I shall be able to bring him some comfort for the future.
The hon. Gentleman also raised the question, which was mentioned in the Ofgas report, of the monitoring of the gasholder at Prestonpans. It will, of course, become an academic question for this site when TransCo completes the current re-enforcement, which will connect the area directly to the higher capacity intermediate pressure system. However, the director general suggested improved inspection, and I understand that TransCo has now decided that, where a gasholder is critical to security of supply, it will be visited more frequently when conditions approach that one-in-20 situation.
I must emphasis that, although the failure was in freak conditions that well surpassed the design criteria, I would not wish it to be thought that TransCo is simply shrugging off the whole issue. Steps are being taken to ensure that such incidents remain exceedingly rare.
In the specific location, the operational constraint that caused the problem—the medium pressure link to the local area—is being replaced with an intermediate pressure link with a much higher capacity. That will effectively rule out a repetition of the incident, and is due to be installed in time for next winter. A stretch of pipeline 1.25 km long has already been installed. I shall ensure that TransCo is aware of the concerns that the hon. Gentleman has expressed, and of the need to ensure that the work is completed before next winter.
More generally, TransCo is considering its response to the recommendations of the Ofgas investigation. However, it is already undertaking further planning and load sensitivity studies to ascertain whether additional opportunities may exist to alleviate supply difficulties in periods of extreme temperature at the limits of the system design criteria. Also, I understand that the Edinburgh district is compiling a report detailing the procedures used throughout the incident, highlighting the learning points from its experience. The report will be distributed to other districts, and any learning points will be incorporated in emergency plans as appropriate. I hope that that reassures the hon. Gentleman.
As I said at the outset, I appreciate the concerns raised by the hon. Gentleman on behalf of his constituents, but I hope that what I have said this evening will provide some reassurance for the future.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.